Notes Module 3 Bangalore University Semester III Small and Medium Enterprises (SME) (Module 3) Q. Explain the Concept of Small and Medium Enterprises (SME) (2 marks) Small and Medium Enterprises (SME) or Small and Medium Businesses (SMBs), are companies whose headcount or turnover falls below certain limits. The abbreviation SME occurs commonly in the European Union and in international organizations, such as the World Bank, the United Nations, and the WTO. The term small and medium businesses or SMBs is predominantly used in the U.S.A. EU Member States traditionally have their own definition of what constitutes an SME, for example, the traditional definition in Germany had a limit of 250 employees, while in Belgium it could have been 100. But now the EU has started to standardize the concept. Its current definition categorizes companies with fewer than 10 employees as "micro", those with fewer than 50 employees as "small", and those with fewer than 250 as "medium". By contrast, in the United States, when small business is defined by the number of employees, it often refers to those with fewer than 100 employees, while medium-sized business often refers to those with fewer than 500 employees. Q. How did the Ministry of MSMED come into existence?(8 marks) In India, the SME is generally referred to as 'small Scale industry' including the tiny sector and the 'Small Scale Services and Business Enterprises' (SSSBE). SMEs have always represented the model of socio economic policies of the Government of India, which emphasized judicious use of foreign exchange for import of capital goods and inputs; labor intensive mode