CLASSIFICATION OF ENTERPRISES INTO MICRO, SMALL AND MEDIUM ENTERPRISES IN NIGERIA: THE CRITERIA ADOPTED

Nnabugwu Chizoba (Charismatic Chizy)

In the recent time, Nigerians have been bombarded on daily basis with either the acronym MSMEs or the full meaning: Micro, Small and Medium Enterprises, or both. Similarly, issues that revolve around government efforts to develop the sub-sector have also being on the front burner. Reasons adduced for the efforts center on perceived benefits of the sector to the growth and sustainable development of the Nigerian economy. I have no doubt that the benefits of MSMEs to the economy are numerous, but the discussion for now is not centered on this, but something totally different.

Like I already said, I won’t bother you here with the benefits of MSMEs; instead I will provide answer to one basic question that most people from the business community that I interacted with recently posed to me. I feel it is necessary to do so. The questions are:

• How does one differentiate between Micro, Small and Medium Enterprises in Nigeria? And
• What criteria are used to classify Nigerian Enterprises into Micro, Small and Medium Enterprises?

I consider the two questions as same and the answer is provided, using the table below. 

		CRITERIA FOR CLASSIFICATION
S/NO	CLASSIFICATION	EMPLOYEES	ASSETS - in Millions, excludes land and building (N)
1	Micro Enterprises	Less than 10	Less than 5
2	Small Enterprises	10 - 49	5 but less than 50
3	Medium enterprise	50 - 199	50 but less than 500

This classification is as provided in the National Policy on Micro, Small and Medium Enterprises, Nigeria.

According to the National Policy on Micro, Small and Medium Enterprises: 

“Where there exists a conflict between employment and assets criteria (for example if an enterprise has assets worth N7 million but employs 7 persons), the employment based classification will take precedence and the enterprise will be regarded as Micro”.  

For most people, any time the Micro Business Enterprise is mentioned, it is the Groundnut Seller, Moi-Moi Seller and the Akara (beans Cake) Seller etc that readily comes to mind. From the Table above it is expected that some of us are better informed and are now in a position to think and contribute better any time issues of MSMEs development and their role towards the reduction of unemployment in Nigeria or the  development of the country is discussed around you.

Before I sign off let me request you to take a close look at the businesses around you, and think of the category they belong.