The Definitions of SMEs

Empowerment of small businesses is important. This strengthening process is a government liabilities assumed the mandate of the people, especially in improving their welfare. But unfortunately, government programs to strengthen small businesses not yet real results.

In addition, the views or perceptions of their own government to SMEs was not the same. Each department has different criteria on SMEs. Differences are mainly related to micro and medium scale enterprises which is still accommodated in the existing legislation. Here are some definitions of existing SMEs.

Law No. 9 of 1995 on Small Enterprises mentions only restriction for small businesses as economic activity of the people who have annual sales of Rp 1 billion and a net worth, excluding land and building, are a maximum of Rp 200 million.

While the Central Bureau of Statistics mengklafisikasi business based on the amount of manpower used, namely (1) industrial workers' households with 1 to 4 people, (2) small industry with 5-19 persons the amount of labor, (3) medium industries with workers 20 - 99 people, and (4) large industries with 100 employees or more. Therefore, small businesses are identical with small industries and home industries.

Bank Indonesia (BI) defines micro enterprises as a business carried on by the poor or near poor, is owned by the family, local resources and simple technologies, as well as easy exit and entry. While small businesses for BI same with the Law on Small Business. Medium business is defined as a business that has assets equal to or less than Rp 5 billion for industrial sector, while non-manufacturing industries is equal to or less than Rp 600 million, excluding land and buildings. Annual turnover equal to or less than USD 3 billion.

While the limitations of the World Bank mentions micro-enterprises having workers equal to or less than 20 people. For small and medium enterprises (SMEs), workers 20 to 150 people, with assets equal to or less than U.S. $ 500,000, excluding land and buildings. (*)