What is a small and medium enterprise? Information you need to know

Small and Medium Enterprises play an important role in economic development, contributing to promoting growth, creating jobs and stabilizing society. So what information do you need to know about What is a small and medium enterprise? Let's find out with SeABank in the following article.

What is a small and medium enterprise?

Currently, small and medium enterprises (SMEs) are the type of enterprises that account for the largest proportion in our country's economy. According to Decree 80/2021/ND-CP, the characteristics and criteria for determining small and medium enterprises are as follows: Small and medium enterprises include: micro enterprises, small enterprises and medium enterprises, with an average number of employees participating in social insurance of no more than 200 people per year and meeting one of the following two criteria:

• Total capital not exceeding 100 billion VND.
• Total revenue of the previous year is not more than 300 billion VND.

Criteria for determining small and medium enterprises

According to Decree 80/2021/ND-CP, the criteria for identifying small and medium enterprises are determined according to the following fields:

Characteristics of small and medium enterprises

Common characteristics of small and medium enterprises include:

• Small capital scale and number of workers: Limited capital scale and difficulty in accessing large investment capital, causing difficulties in investing in business and production.
• Facing fierce competition from large corporations and businesses operating in the same industry, losing out in the ability to dominate the market.
• Diversified operations in many fields: Small and medium enterprises operate in many fields such as: industry, agriculture, forestry, construction, trade and services.
• Flexibility in business: This is the most prominent characteristic of small and medium enterprises. Thanks to the small and medium-sized structure, enterprises have the ability to adapt to changes in business lines more flexibly than large enterprises. The ability to grasp market trends is also from there more focused by enterprises.

Small and medium enterprises have small capital and number of employees.

The role of small and medium enterprises

In Vietnam, the proportion of small and medium-sized enterprises accounts for 98% of the total number of operating enterprises. Therefore, this is a force that contributes significantly to GDP in creating jobs for the economy. Not only that, the role of this force is very important, specifically:

• Not only does it contribute significantly to GDP growth, it is also one of the effective solutions to solve the problem of hunger eradication and poverty reduction, creating jobs for the economy.
• Play a role in stabilizing the economy: In the business market, small and medium enterprises can take advantage of niche markets that large corporations and enterprises ignore. They can also join hands with other enterprises to produce and consume more effectively, helping the economy to be distributed evenly and stably in all fields.
• Driving force of business environment: This is a sensitive, dynamic and flexible force in changing business thinking as well as industries, creating momentum to shift the economic structure.
• Boost the local economy: If large enterprises often locate their facilities in key economic zones, small and medium enterprisesThey appear in more economic regions than large enterprises, so they also contribute to creating jobs for local workers.

Small and medium enterprises are a sensitive and dynamic force in the economy.

Thus, there are the answers to the questions: What is a small and medium enterprise? It can be seen that the small and medium enterprises force is accounting for the majority of enterprises in our country. However, there are still many limitations that enterprises face such as: Limitations in resources, human resources, management capacity. In which, capital resources are the top concern of enterprises.

Currently, our government has many policies to support business loans. At the same time, financial institutions have also introduced credit solutions for this group. Prominent among them is SeABank with many support solutions such as: Credit financing by industry, credit financing by facility, and chain financing.

With its professionalism, SeABank is confident to bring customers comprehensive solutions. For all information about products supporting small and medium enterprises, you can refer to the website SeABank or contact Hotline 1900.599.952 (Business Customer) for fastest advice!