Yu, Josely V.

SFENT 3E

Micro-Finance: Assignment #1

Category of businesses when it comes to micro, small, & medium enterprise:

> Capitalization
> Number of employees
> Privileges

Answer:

Micro, small and medium enterprises (MSMEs) have a very important role in developing the
Philippine economy. They help reduce poverty by creating jobs for the country’s growing labor
force. They stimulate economic development in rural and far-flung areas. They serve as
valuable partners to large enterprises as suppliers and providers of support services. They
serve as breeding grounds for new entrepreneurs and large corporations. A vibrant MSME
sector is thus an indication of a thriving and growing economy. Despite policies that aim to
provide an enabling environment for MSME development, the sector still faces various
constraints that prevent it from realizing its full growth and potential.

The determination of what constitutes a Micro, Small and Medium Enterprise (MSME) is based
on its total assets. This is provided in Republic Act No. 6977, as amended (also known as the
“Magna Carta for Micro, Small and Medium Enterprises (MSMEs)“, previously called the “Magna
Carta for Small Enterprises”. The term MSME refers to any business activity or enterprise
engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative,
partnership or corporation whose total assets must have value falling under the following
categories:

● MICRO : not more than P3,000,000

● SMALL : P3,000,001 – P15,000,000
 ● MEDIUM : P15,000,001 – P100,000,000

In addition, small and medium-sized enterprises (SMEs) employ fewer than 250 people. SMEs
are further subdivided into micro enterprises (fewer than 10 employees), small enterprises (10
to 49 employees), medium-sized enterprises (50 to 249 employees). Large enterprises employ
250 or more people.