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Micro-enterprise
A micro-enterprise (or microenterprise) is generally defined as a small business employing nine people or fewer, and having a balance sheet or turnover less than a certain amount (e.g. €2 million or PhP 3 million). The terms microenterprise and microbusiness have the same meaning, though traditionally when referring to a small business financed by microcredit the term microenterprise is often used. Similarly, when referring to a small, usually legal business that is not financed by microcredit, the term microbusiness (or micro-business) is often used. Internationally, most microenterprises are family businesses employing one or two persons. Most microenterprise owners are primarily interested in earning a living to support themselves and their families. They only grow the business when something in their lives changes and they need to generate a larger income.
The concepts of micro-enterprise and microfinance were pioneered in 1976 by Nobel Prize recipient Muhammad Yunus, founder of the Grameen Bank (Bank of the Rural), in Bangladesh. The bank was established for the purpose of making small loans to the poor − predominantly women – to help them obtain economic self-sufficiency. The fundamental principle behind the Grameen Bank is that credit is a human right. This strategy was highly effective as the bank grew exponentially; from fewer than 15,000 borrowers in 1980, Grameen Bank had 2.34 million members by 1998, 7.67 million at the end of 2008, 97% of whom are women, and 9.4 million today.
The term micro-enterprise or microbusiness refers to different entities and sectors depending on the country.
In India, all the manufacturing and service enterprises having investment "Not more than Rs 1 crore" and Annual Turnover "not more than Rs 5 crore" come under this category.
In Australia, the term refers to a business bigger than a single owner-operator, but having up to 5 employees.
The European Union (EU) defines "micro-enterprises" as those that meet two of the following three criteria and do not fail to do so for at least 10 years:
The Office for National Statistics and the Department for Business, Energy and Industrial Strategy both maintain statistical records which officially classify businesses of 1–9 employees as being micro-businesses. The House of Commons Library maintains a briefing note pulling together these statistical sources.
In the United States, a different model is used, but the stated goals and core values are similar. According to the Small Business Administration, a microenterprise or microbusiness is defined as a business with 1-9 employees. They are the most common type of business. As a subcategory of small businesses, with sales and assets valued at less than $250,000 per year, they generally have less than five employees, including the owner. Additionally, such micro-enterprises generally need less than $35,000 in loan capital as a startup, and do not have access to the conventional commercial banking sector. The basis of microenterprise in the U.S. is entrepreneurship, recognizing that people have the right to apply their individual talents, creativity, and hard work to better their lives.
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Micro-enterprise
A micro-enterprise (or microenterprise) is generally defined as a small business employing nine people or fewer, and having a balance sheet or turnover less than a certain amount (e.g. €2 million or PhP 3 million). The terms microenterprise and microbusiness have the same meaning, though traditionally when referring to a small business financed by microcredit the term microenterprise is often used. Similarly, when referring to a small, usually legal business that is not financed by microcredit, the term microbusiness (or micro-business) is often used. Internationally, most microenterprises are family businesses employing one or two persons. Most microenterprise owners are primarily interested in earning a living to support themselves and their families. They only grow the business when something in their lives changes and they need to generate a larger income.
The concepts of micro-enterprise and microfinance were pioneered in 1976 by Nobel Prize recipient Muhammad Yunus, founder of the Grameen Bank (Bank of the Rural), in Bangladesh. The bank was established for the purpose of making small loans to the poor − predominantly women – to help them obtain economic self-sufficiency. The fundamental principle behind the Grameen Bank is that credit is a human right. This strategy was highly effective as the bank grew exponentially; from fewer than 15,000 borrowers in 1980, Grameen Bank had 2.34 million members by 1998, 7.67 million at the end of 2008, 97% of whom are women, and 9.4 million today.
The term micro-enterprise or microbusiness refers to different entities and sectors depending on the country.
In India, all the manufacturing and service enterprises having investment "Not more than Rs 1 crore" and Annual Turnover "not more than Rs 5 crore" come under this category.
In Australia, the term refers to a business bigger than a single owner-operator, but having up to 5 employees.
The European Union (EU) defines "micro-enterprises" as those that meet two of the following three criteria and do not fail to do so for at least 10 years:
The Office for National Statistics and the Department for Business, Energy and Industrial Strategy both maintain statistical records which officially classify businesses of 1–9 employees as being micro-businesses. The House of Commons Library maintains a briefing note pulling together these statistical sources.
In the United States, a different model is used, but the stated goals and core values are similar. According to the Small Business Administration, a microenterprise or microbusiness is defined as a business with 1-9 employees. They are the most common type of business. As a subcategory of small businesses, with sales and assets valued at less than $250,000 per year, they generally have less than five employees, including the owner. Additionally, such micro-enterprises generally need less than $35,000 in loan capital as a startup, and do not have access to the conventional commercial banking sector. The basis of microenterprise in the U.S. is entrepreneurship, recognizing that people have the right to apply their individual talents, creativity, and hard work to better their lives.