Global Tenders | Procurement News

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SME Small Medium
Scale Enterprise
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MICRO, Medium SmALL Scale Enterprise SME
finance is the funding of small and medium-sized
enterprises and represents a major function of
the general business finance market in which
capital for different types of firms are
supplied, acquired, and coasted or priced.
Capital is supplied through the business
finance market in the form of bank loans and
overdrafts leasing and hire-purchase
arrangements equity and asset-based finance such
as factoring and invoice discounting.
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SME
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Micro Scale Enterprise
Micro-scale enterprise is a business that employs
a small number of workers Not more than 25,00,000
(Rupees Twenty Five Lakhs only).
Medium Scale Enterprise
Small-scale enterprise is a business that employs
a small number of workers and does not have a
high volume of sales. Such enterprises are
generally privately owned and operated sole
proprietorships, corporations or partnerships.
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SMALL Scale Enterprise
A medium enterprise is an enterprise where the
investment in plant and machinery is more than
Rs.5 crore but does not exceed Rs.10 crore.
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Production and Investment in SMEs
The total production of the SMEs showed a
phenomenal growth in FY07 as compared to the
previous year. The production at current prices
experienced a growth rate of around 18 against
15.8 in the previous year, thereby raising its
share to India's GDP up to15.5 during the year.
The SME sector has also registered a
consistently higher growth rate than the overall
manufacturing sector. In fact, it plays a dual
role since the output produced by SMEs is not
only about final consumption but also a source of
capital goods in the form of inputs to heavy
industries.
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STRENGTH AND WEAKNESSES OF SMEs
STRENGTH
Flexibility Small and Medium Enterprises can
easily absorb new innovation and adapt new
method. The cost of changing the existing system
is also relatively less. Owner management In
Small and Medium Enterprises owner management is
a possibility, which ensures quick decision
making. This ensures speed and reduces redtapism.
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STRENGTH AND WEAKNESSES OF SMEs
WEAKNESS
Lack of Financial Strength The Small and
Mediunor brand image and hence mobilizing capital
through other sources is a challenge m
Enterprises depend largely on banking finance.
They dont have corporate image. Lack of
Industrial Work Culture Labors give more
weight-age to their personal work and don?t
maintain regularity, discipline in reporting on
time. Getting and continuing with trained workers
and satisfying them is difficult.
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Typical Barriers for SME to access Public
Procurement

• Large Contract volumes and broad capabilities
  required
• Over- emphasis on price and costly industry
  standards and certifications
• Insufficient access to information about
  opportunities
• Lack of knowledge about procedures
• Limited tendering skills and experience
• Lack of time to prepare bids
• Little dialogue with procurer and feedback
• Late payments

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Channels for SMEs participation

• However, SMEs may also take part in the delivery
  of public contracts through other channels
• as member (but not leader) of a consortium or
  other joint bid arrangement
• 2. as a subcontractor
• 3. as a generic supplier not named as
  subcontractor

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