This document discusses definitions of micro, small, and medium enterprises (MSMEs) in various countries. It provides details on MSME definitions used in Australia, Canada, Myanmar, and proposes a definition for Khyber Pukhtunkhwa. Definitions vary across countries and may consider factors like number of employees, annual turnover, assets, and investment amount. For example, Australia defines small businesses as those with less than 20 employees based on ABS, while the Fair Work Act defines small businesses as those with less than 15 employees. Myanmar's definition incorporates four criteria that can be difficult for enterprises to meet. The document concludes by proposing employee, capital investment, and annual production thresholds for defining MSMEs in K

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MSME
MICRO, SMALL, and MEDIUM ENTERPRISES
MSME:
MSME stands for micro small and medium enterprises these are considered to be the back bone of the
economy through out the globe. Due to its importance every country defined it in their own way and
according to their own mind frame and economy status ,every country have made their own criteria and
give it different limits. Its definition across the globe carries different variables, these variables include
number of turnover, capital, employment, investment and asset; and these variables can be
differentiated by industry in some cases.
Within an economy there are different agencies which have their definition of MSME (e.g. banks,
statistical institutions, government MSME promotional institutions)
In a research conducted by IFC it was founded that out 120 economies covered 26 economies have
more than one definition of MSME.
Below are some of the definitions of MSME in different countries:
Australia:
They define MSME in two ways as given below:
1. Australian Bureau of Statistics:
According to Australian Bureau of Statistics
Small business is defined as a business employing less than 20 people. Categories of small businesses
include:
 non-employing businesses — sole proprietorships and partnerships without employees;
 micro businesses — businesses employing less than 5 people, including non-employing
businesses;
 other small businesses — businesses employing 5 or more people, but less than 20 people;
Small businesses tend to have the following management or organizational characteristics:
 independent ownership and operations;
 close control by owners/managers who also contribute most, if not all the operating
capital
 Principal decision-making by the owners/managers.
ABS presents statistics for the following categories:
 medium businesses — businesses employing 20 or more people, but less than 200 people; and
 large businesses— businesses employing 200 or more people
A size definition based on employment is not used for the agricultural statistics presented in this
publication. Agricultural businesses can have large scale operations with relatively few or no permanent
employees, using large numbers of seasonal and itinerant workers to satisfy short term labour needs.

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To provide a size classification the ABS has developed, for statistical purposes, a measure of the
Estimated Value of Agricultural Operations (EVAO) based on:
 the area of crops sown;
 the number of livestock; and
 crops produced and livestock turn-off (mainly sales) during the year.
A small agricultural business is defined as one having an EVAO of between $22,500 and $400,000.
Businesses with an EVAO of less than $22,500 are excluded from ABS statistics because they are not
generally operated as a business venture and their contribution to commodity aggregates are generally
insignificant.
Interpretation:
Micro enterprise: 0-5 employees
Small enterprise: 5-19 employees
Medium enterprise: 20-200 employees.
2. Parliament of Australia:
According to federal legislature Fair work Act 2009
 A national system employer is a small business employer at a particular time if the employer
employs fewer than 15 employees at that time.
 For the purpose of calculating the number of employees employed by the employer at a
particular time
 For the purpose of calculating the number of employees employed by the employer at a
particular time, associated entities are taken to be one entity.
Interpretation:
Fair Work Act 2009 is an Act relating to workplace relations, and for related purposes. Small Business
employer is defined as one with fewer than 15 employees.
Canada:
Canada defines MSME in three different ways:
1. Government of Canada:
In some instances, Industry Canada has used a definition based on the number of employees, which
varies according to the sector goods producing firms are considered small if they have fewer than 100
employees, whereas for service producing firms the cut-off point is 50 employees. Above that size, and
up to 499 employees, a firm is considered medium-sized. The smallest of small businesses are called
micro-enterprises, most often defined as having fewer than five employees. The term SME refers to all
businesses with fewer than 500 employees, whereas firms with 500 or more employees are classified as
large businesses.

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2. Canadian Bankers Association:
They said that the company will Classify as a small company if it qualifies for a loan authorization of
less than $250 000.
3. Export Development Corporation:
They said that the Small or emerging exporters are those firms which have their export sales under
$1 million.
Myanmar:
Myanmar uses another criteria of horsepower used along with employees and turn over.
Interpretation:
Categories Micro Small Medium
Power used
(Horse power)
3-25 26-50 Over 50
Number of workers 10-50 51-100 Over 100
Capital investment
(million kyat)
Up to 1 1-5 Over 5
Annual production
(million kyat)
Up to 2.5 2.5-10 Over 10
Source: private industrial law (1990)
COMMENTS ON VARIOUS DEFINITIONS OF MICRO, SMALL, And MEDIUM
ENTERPRISES
 Canadian view about the definition of MSME:
Given by Canada Immigration Lawyer “DAVID COHEN”
i. He said that “as every one knows that Canada is an ongoing country towards its goals so
it is necessary that they keep the best of employees in their pocket.
ii. Secondly “as many of their workforces is outside of the country so there fore they also
decided that they will give work to the foreign temporary workers, by doing this they
will get the advantage of other countries people mind frame, and they will get more
ideas about their work. And also the guest workers will stay here legally as long as their
Canadian employees want them”.
iii. Thirdly as they want to have workers at lower wages and that’s why they have got
people getting low wages in good production and that is why they have high number of
workforce in goods production sector as compare to service producing sector.

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 Australian view about the definition of MSME:
A question will arise in our mind that why Australia is defining MSME through the criteria of
employment, so
According to the FWA (Fair Work Act) in Australia, it includes the approval of enterprise
agreements and handling claims for unfair dismissals.
So that’s why in Australia this law imposes the number of employees and criteria in defining the
MSME.
 Myanmar view about the definition of MSME:
According to “Aung Kyaw” Assistant Lecturer, Yangon Institute of Economics.
“ Small and medium enterprises (SMEs) share the biggest part in Myanmar economy in terms of
number, contribution to employment, output, and investment. Myanmar economic growth is
thus totally dependent on the development of SMEs in the private sector”.
So that’s why it contains more criteria’s than other countries definition of MSME.
He also said that this definition of MSME in Myanmar creates complications and these
complications generate problems.
If I conclude it in my words then it is difficult for an enterprise to fulfill all the four criteria’s of
MSME at one time.
If a business employs 15 workers and uses less than three horsepower but invests more than
five million kyat. So what will we call it then? Thus it is difficult to classify the business form.
Definition of MSME in Khyber Pukhtunkhwa:
As there is no standard definition for MSME in KPK therefore in my view the definition of MSME
will have to be:
As there is a lot of unemployment in our province so keeping that in view I suggested the
definition of MSME as:
S.NO CATAGORIES MICRO SMALL MEDIUM
1 EMPLOYEES 1-25 26-100 101-250
2
CAPITAL
INVESTMENT
(RUPEES)
<300000 300000-500000 500000-1000000
3
ANNUAL
PRODUCTION
(RUPEES)
Up to 500000 500000-1000000 1000000-
1500000

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REFERENCES:
http://www.canadavisa.com/canada-immigration-blog/ Dated: 2/01/2012
http://en.wikipedia.org/wiki/Fair_Work_Australia Dated: 2/01/2012
www.ide.go.jp/English/Publish/Download/Dp/pdf/148.pdf Dated: 3/01/2012
www.ifc.org/ifcext/gfm.nsf/.../MSME-CI-Note/.../MSME-CI-Note.pd...Dated:3/01/2012