Scales of Business

What is a Micro Enterprise?

What is a micro enterprise? The grocery store in your locality that sells groceries, FMCG goods, sometimes dairy products and fruits and vegetables is a classic example of micro enterprise. Let us learn more about them.

Suggested Videos

Play
Play
previous arrow
next arrow
previous arrownext arrow
Slider

 

Micro Enterprise

A micro enterprise is a small business which sells goods and/or services to a local area or a local market. It employs less than 10 people generally and is geographically restricted. Typically a micro enterprise starts with some form of funding – known as micro credit or micro finance.

micro enterprise

Micro enterprises are usually a trademark of a developing country and economy, like India’s. There is a dearth of jobs in the formal sector and micro enterprises aim to fill in the gap. They help the economy by not only creating jobs but also lowering production costs, increasing purchasing power and providing convenience.

In fact, the government encourages micro enterprises, especially in low-income areas. It helps the business and economy grow. And such enterprises also show promise of sustainable development. They help fill a necessary niche in developing economies.

For example, the local tailor shop in your area may be called a micro enterprise. He may take a small loan (micro credit) to set up his shop and buy materials. He or she employees a few workers and assistants. And they provide their goods and services in a limited area, i.e. they do not have a wide distribution network.

Browse more Topics under Scales Of Business

Objectives of Micro Enterprise

  • Micro enterprises aim to create large-scale employment in the economy, separate from the formal sector. And they can achieve this target with very limited finances and investment.
  • Another objective is to spread industries and trade in an economically backward area. This helps in the development of the overall economy.
  • The objective is to bring the backward areas into the plan for national development. So they aim to promote regional development.
  • Micro enterprises also aim to improve the mobilization of the abundance of natural resources in our country.
  • Also to improve the living conditions of all the citizens of the country, irrespective of where they live and work.

Role of Micro Enterprises in the Development of the Indian Economy

The improvement and subsequent development of small-scale industries and micro enterprises in the country have led to a significant increase in the per capita income in our economy. This can be developed as economic development.

Also, micro enterprises majorly contribute to the employment of our country. They help with the economic development of smaller towns and villages and close the development gap between rural and urban economies.

Micro Financing in India

One key component in the growth and development of micro enterprises is the establishment of micro-financing and micro credit in India. Micro finance is described as when credit or other such loan facilities of relatively small amounts are given to entrepreneurs and business people to start or fund a small business or a micro enterprise.

In India, banks and NBFC provide micro finance to individuals. The aim is to help them out of poverty and set them up with micro enterprises so they can earn a living and promote economic development.

Solved Question on Micro Enterprise

Q: A micro enterprise is an enterprise in the business of providing services, where the investment in equipment does not increase ___

  1. 25 lacs
  2. 15 lacs
  3. 10 lacs
  4. None of the above

Ans: The correct option is C – 10 lacs. And in case, the enterprise is in the business of manufacturing goods then such investment is 25 lacs.

Share with friends

Customize your course in 30 seconds

Which class are you in?
5th
6th
7th
8th
9th
10th
11th
12th
Get ready for all-new Live Classes!
Now learn Live with India's best teachers. Join courses with the best schedule and enjoy fun and interactive classes.
tutor
tutor
Ashhar Firdausi
IIT Roorkee
Biology
tutor
tutor
Dr. Nazma Shaik
VTU
Chemistry
tutor
tutor
Gaurav Tiwari
APJAKTU
Physics
Get Started

14
Leave a Reply

avatar
11 Comment threads
3 Thread replies
1 Followers
 
Most reacted comment
Hottest comment thread
14 Comment authors
Lindah ChesutRavivarmanAasif ShabanAngelLAVANYA D Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Sanam
Guest
Sanam

It was really nice!

Thanks

prem
Guest
prem

yes

Chaithra
Guest

Tq For give information

Gyu
Guest
Gyu

I am good
😀😀

Avishek
Guest
Avishek

Need to start small scale industries which will help me to servive .waiting for ur opion

Jejeswara
Guest
Jejeswara

8125162161

Proxy
Guest
Proxy

How many principle of management apply on small scale industrys

Pardeep
Guest
Pardeep

Kya small scale industry ka experience government jobs me chl jayega kya

Udheyami
Guest
Udheyami

Thanks. It helped me

Isaac Musinguzi
Guest
Isaac Musinguzi

I have enjoyed how everything is well explained.
Thanks for everything.

karthik patel
Guest
karthik patel

is small scale industry is profitable? How much investment needed to start a SCI?

Angel
Guest
Angel

5 crore

LAVANYA D
Guest
LAVANYA D

Hello, I want to start a small scale industry in Hyderabad. Please guide me .

Aasif Shaban
Guest
Aasif Shaban

The article’s are always helpful for us. The investment limited and annual turnover had changed now for SSI’s, I guess articles of such nature should be updated as well on this innovative plateform.
❤️

Ravivarman
Guest

What premit documents by government are needed us to make ssi

Lindah Chesut
Guest

Why is it cheaper producing good in large scale

Customize your course in 30 seconds

Which class are you in?
No thanks.