Sme Sector In South Arica

CHAPTER 2
AN OVERVIEW OF SME SECTOR IN SOUTH AFRICA

2.1 INTRODUCTION

2.2 Nature of SMEs
Researchers and scholars have failed to act up with a universally accepted definition of SMEs. A number of countries define SMEs based on the characteristics of the market in which the enterprise operates which has led to most countries defining SMEs based on the level of economic development (Analoui and Al-Madhoun, 2006:2). The following section highlights on the major characteristics of SMEs:
Characteristics of SMEs
Pandey, Prasad and Shivesh (2007:2) identify the following characteristics in SMEs:
?Born by of individual initiatives &skills
?Greater operational flexibility
?Low cost of production
? higher(prenominal) propensity to adapt technology
? eminent capacity to innovate & export
?High employment orientation
?Utilization of locally available human & visible resources
?Reduction of regional imbalances
There atomic number 18 other features which atomic number 18 essential for SMEs besides the above mentioned for instance, contribution towards growth house servant product, providing a nationwide pool of skilled and trained manpower and enhancing social life in the country.



The characteristics differ according to dissimilar countries though a number of common elements are identified such as number of employees, turnover and assets. Based on these facts, there is need to define SMEs comprehensively in legal injury of international and South African perspectives.

The International Perspective
The European league Commission defines SMEs based on three major components which are the number of employees, the firms turnover and the balance sheet. As from 1 January 2005, the Union classified SMEs if the criterion stated in the table which follows is met (European Commission Enterprise and Industry, 2005);
Enterprise category passing CountTurnoverBalance Sheet
Medium sized little than or equal to 250Less than or equal to 50 one million million poundsLess than or equal to 43 million pounds
SmallLess than or to...If you want to get a full essay, order it on our website: Ordercustompaper.com



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