SME Full From is Small to Medium Enterprises. These are business models or companies that have less than certain defined limit in certain personal numbers. These numbers include a number of employees and the profit limit. The numbers that define SME can vary between countries. The SME figures pertaining to India, according to the MSMED (Micro, Small, and Medium Enterprises Development) act of 2006 are (1) A small enterprise is the one where the investment of machinery and plant is between 12 lakh and 5 crores, (2) A medium enterprise is the one where the investment of machinery and plant is between 5 crore and 10 crores.
The SME sector in India is said to be the backbone of the economy. It contributes to over 40% of the exports and there are over 60 million people employed with around 1.3 million jobs created each year. Small and Medium-sized Enterprises are essentially businesses whose numbers of personnel fall below a prescribed limit. The acronym SME is primarily used in the European Union as well as by other international bodies such as the United Nations (abbreviated as the UN), the World Trade Organization (abbreviated as WTO), and the World Bank.
SMEs have long outnumbered big enterprises by a wide margin and are known to employ a greater number of people. These businesses are often credited to have motivated competition and innovation in several economic sectors. The definition of SMEs varies from one to country to the other and the variation may be minute or wide depends upon many parameters. For example, in Kenya, the acronym MSME is used; it stands for Micro, Small, and Medium Enterprises.
A typical MSME will have 1000 employees maximum. In Nigeria, The central Bank of Nigeria states that definition is based as per the number of personnel and asset base of the business concerned. In India, Section 7 of Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 defines the size of these three categories of enterprises. Within the European Union, the definition differs from one member nation to another member nation on parameters such as financial subsidy and business rate reduction.
In New Zealand, an enterprise that employees 19 or fewer persons will fall within the category of SME. In Australia however, an enterprise with 200 or fewer personnel numbers would fall within the category of SME. SMEs in Australia contribute about 97 percent of the Australian business and produce about one-third of the cumulative Gross Domestic Product (abbreviated as GDP). In the United States of America, the Small Business Administration is the body responsible for setting up necessary standards for SME.