Development of Micro Enterprises: Issues & Recommendations

1. Development of Micro Enterprises: Issues & Recommendations at 2011 Global Summit of Women Growing Microenterprises into the Mainstream Economy Istanbul, Turkey: May 7, 2011 Presented by : GyanPrakashAgarwal, Secretary General World Association for Small and Medium Enterprises (WASME)

2. Contents • Introduction • Role & Significance of Micro Enterprises (MEs) • Characteristics of MEs • Factors contributing to the growth of MEs • Development of MEs: Benefits • Major Constraints hindering MEs’ access to Productive Resources • Development of MEs: Recommendations

3. Introduction • Non-crop production economic activities • Whole range of productive activities including trading, services, and manufacturing • Defined by using different criteria: size of employment, level of income or asset size • Proliferation of MEs: (i) Gaps between the services available and needs of low income households; and (ii) Lack of formal and sustainable employment opportunities • Livelihood Enterprises and Growth-oriented Enterprises • Majority of MEs operating in informal sector

4. Role & Significance of MEs • Comprise bulk of all enterprises • Contribute a significant share of employment and value-added to the economy • Help ensure a more equitable distribution of income • Dispense economic activities to the countryside • Poverty reduction and empowerment of women • A potent force in the war against poverty

5. Characteristics of MEs • Independent and largely family owned • Very limited geographic markets • Many MEs activities are seasonal • Most operate at their place of residence • Require very little productive resources – skill, labour, capital, equipment, assets • Employ low levels of skills and technology • Easy to engage in and exit from

6. Factors contributing to the growth of MEs • Financing • Markets • Places of doing business • Equipment and other physical assets • Technology • Appropriate market information • Skills • Linkage to formal sector

7. Development of MEs: Benefits • Poverty reduction • Additional employment opportunities • Increase in collection of taxes • Increase in contributions to GDP • Enhancement in socio-economic status of poor • Inclusive growth of nation • Achieving Millennium Development Goals

8. Major Constraints hindering MEs’Access to Productive Resources • Lack of conducive policy environment • Lack of access to institutional credit • Lack of infrastructure • Imperfect market information • Lack of opportunities for skills development • Weak presence and reach of support institutions

9. Development of MEs: Recommendations • Favourable policy environment • Overcome institutional obstacles to implementing effective MEs development programmes • Development Impact Objectives:Based on the distinction between Livelihood & growth-oriented micro enterprises • Priority Thrusts: New enterprises promotion, enterprise expansion and enterprise transformation • Critical Productive Resources: Access of MEs’ to critical productive resources such as financing, markets, premises and places for doing business, equipment and other physical assets, technology, skills, market information, business development services

10. Thank You