Just when you thought you had transitioned from a small business to a medium scale enterprise, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) popped the question; where do you think you’re going?
Jokes aside though; the Director General and Chief Executive of SMEDAN, Dr. Dikko Umaru Radda, recently declared here that Micro Small and Medium Enterprises (MSMEs) in Nigeria would now be categorized based on turnover and not their asset base, as was the case initially.
The existing National Policy on MSMEs, which was recently reviewed and approved by the Federal Government, splits micro enterprises into groups; Nano/Homestead and Micro Enterprises for reasons I will explain, as we go.
Please don’t panic; just hear me out.
In 2007, when the first national policy was approved, inflation and naira devaluation were not as bad as they are today. Come to think of it; how many MSMEs have worthy assets to their names? So, how do you now want them to be classifying, you based on ‘vague’ assumptions when they can do so with your turnover, which can be measured without error? You sef; think am!
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So, right now, as we speak, MSMEs have been further categorised as Nano, Micro, Small and Medium enterprises.
The nano/homestead businesses are required to have one to two employees with turnover of less than N3 million while their Micro counterparts are to employ three to 25 staff with turnover of N3 million to N25 million.
Small businesses, on the other hand, are required to have between 10 to 40 staff with turnover of over N25 million while Medium enterprises employ 50 to 199 staff and a turnover of over N100 million before they can be qualified as such.
I know you might still be boiling now but it’s not only us that are practicing this. India, adopted this approach when they found themselves in this situation we are currently in but not to worry. The Company income tax waiver/incentive for small businesses under the Finance Act 2020 is also tied to turnover and not asset base, so no shaking. No matter your category, you can still ask us for help here
Oya, smile for me and say thank you in the comments.
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