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  Several people and businesses have missed opportunities because they were not sure they fit into the category of possible beneficiaries of propositions. To put things in context, let us delve into understanding, contextualising and identifying with the different relevant categorisations of MSMEs for possible opportunities when they arise.
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The relevance of Micro, Small & Medium Enterprises (MSMEs) to economic development in both developed and developing countries cannot be overlooked as they contribute immensely to job and wealth creation, income redistribution, promotion of the usage of local raw materials, incubation of new ideas and innovation, and a major contributor to gross domestic product (GDP). These are some of the reasons why government and relevant stakeholders are concerned about the health, growth, and survival of the MSMEs. According to the World Bank (2017), Small and Medium Enterprises (SMEs) are the engine of the world economic growth and development as they account for over; 95 percent of registered firms; 50 percent of jobs, and are responsible for at least 35 percent of Gross Domestic Product (GDP) in many developing countries. Also, the Nigerian Bureau of Statistics (NBS), Nigerian MSMEs contribution to the national Gross Domestic Product (GDP), stood at 49.78 percent to GDP in 2017 as well as engaged the most number of persons in terms of employment and labour. The 2017 NBS-SMEDAN National Survey of MSMEs Report revealed that the total number of MSMEs as of December stood at 41,543,028, with components as follows, viz: micro enterprises – MEs: 41, 469,947 (or 99.8 percent), small and medium enterprises – SMEs: 73,081 (or 0.2 percent). With a total employment contribution of 59,647,954 persons, including owners, in December 2017 (equal to 86.3 percent of the national workforce).

Where Do You Belong?

The definition of Micro Small and Medium Enterprises (MSMEs) varies with respect to each country, agencies and parastatals due to global diversity and their characteristics. Different countries define MSMEs in terms of workforce, management structure, capital investment, turnover, size, and sector. Countries such as Britain, the United States, and various European countries used criteria like turnover and number of employees in defining small-scale enterprises. There are definitions according to the World Bank, United Nations, Nigeria, and others. It is good to note that the different definitions have similar features.
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Nigeria’s definition and classification are based on turnover, capital employed/Assets, and workforce, and has variants from different sectors and agencies such as Bank of Industry, Central Bank of Nigeria, Nigerian industrial policy, the Small and Medium Industries Equity Investment Scheme (SMIEIS) and the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN). SMEDAN’s 2015 national policy on MSMEs adopted a dual-criteria categorisation of MSMEs based on staff count and asset value (excluding land and buildings). In the case of ambiguity in agreeing on classification, the staff count criterion supersedes asset value. The SMEDAN/NBS MSMEs survey 2017 provided further clarification with the introduction of two recommendations to distinguish actual “enterprises” from mere “income-generating activities” termed as “One Man Business” class and categorised as nano enterprises. The Federal Republic of Nigeria SMEDAN’s National Policy on MSMEs (2021-2025 edition) further reviewed, replacing asset-based focus with turnover amongst others and has the classification as follows: (1). Size Category: Nano/Homestead enterprises; Employment: 1 to 2; Turnover: less than N3Million. (2). Size Category: Microenterprises; Employment: 3 to 9; Turnover: N3Million to N25Million. (3). Size Category: Small enterprises; Employment: 10 to 49; Turnover: N25Million plus but less than N100Million. (4). Size Category: Medium enterprises; Employment: 50 to 199; Turnover: N100Million plus but less than N1Billion. The classification, especially the introduction of Nano/Homestead enterprises would be very useful for implementing government procurement inclusiveness plans, relief and intervention programs, capacity building nurturing to scale up.

What To Do: Go For It!

Remember to check for available opportunities online, discuss with your business association, relevant government agencies of business development consultants to explore possible and available opportunities. Featured Image Source: Freepik
Got a suggestion? Contact us: editor@connectnigeria.com
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This article was first published on 15th September 2021

funke-medun

Funke Medun is a World Bank trained business development support (BDS) services consultant, a licensed HR practitioner, an international development consultant, a seasoned professional with several years’ experience in banking, consulting, human resources, training, executive coaching, and entrepreneurship development.

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