The UN General Assembly declared the 27 June the Micro-, Small and Medium-sized Enterprises Day, recognizing the importance of these enterprises and their contribution to sustainable development.
What are MSMEs?
In Europe the definition of micro-, small and medium-sized enterprises is established according to the number of employees and the annual turnover or balance sheet:
- micro-enterprise: employs fewer than 10 employees and has an annual turnover or balance sheet below €2 million.
- small enterprise: employs fewer than 50 employees and has an annual turnover or balance sheet below €10 million.
- medium-sized enterprise: employs fewer than 250 employees and has an annual turnover below €50 million or balance sheet below €43 million.
MSMEs make up over 99% of all firms in Europe. Worldwide they account on average for 60-70% of total employment and 50% of GDP.
MSMEs tend to employ a larger share of the vulnerable sectors of the workforce, such as women, youth, and people from poorer households.
Smaller businesses can be agile in response to a changing world but their size also makes them vulnerable. Access to finance is a primary obstacle. With the goal of overcoming these challenges, the UN's International Trade Center launched its flagship report: “The SME Competitiveness Outlook 2019: Big money for small businesses."
The EU Commission works tirelessly to provide MSMEs with access to finance as well as other forms of support programmes targeted specifically at these enterprises.
In the EU there are 2 broad types of potential benefit for an enterprise if it meets the criteria of an MSME namely:
- eligibility for support under many EU business-support programmes targeted specifically at SMEs. This includes research funding, competitiveness and innovation funding and similar national support programmes that could otherwise be banned as unfair government support.
- fewer requirements or reduced fees for EU administrative compliance.
In Malta, Business First offers various funding opportunities for small enterprises through the ERDF Grant Schemes. Small enterprises may apply for the following grants:
- START-UP INVESTMENT: This grant is intended to help businesses implement their ideas and fund the initial investment costs in both tangible and intangible assets required to grow the business.
- SME GROWTH: This grant also funds investments in tangible and intangible assets which an enterprise needs to extend their current establishment or set up a new establishment.
- SME DIVERSIFICATION: This grant funds investments to help enterprises diversify. This grant is aimed at investments incurred by enterprises which make a fundamental change, or innovate by bringing improved and advanced products or services to those already offered by the undertaking.
- SME INTERNATIONALISATION: This grant funds costs incurred by enterprises which intend to offer their products/services to new markets or which need to strengthen their international presence for example stands at fairs.
- E-COMMERCE GRANT: This grant funds the development of an e-commerce website and/or mobile application or upgrade to an existing website and/or mobile app to enable online payments or booking systems through integration of payment gateway.
- SME CONSULTANCY GRANTS: This grant funds the costs of external consultants to assess and evaluate the operations, processes and systems of your business aimed at rendering it more efficient; and the potential of the enterprise to undertake proposed investments aimed at the potential future business growth and at rendering it more competitive such as drafting of business plans; feasibility studies etc. These are required in order to apply for the above grants (1) – (5).
Originally published by GVZH Advocates, on June 2020
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