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| Micro, Small & Medium Enterprise Development in the Caribbean: Towards A New Frontier
Much depends on the character of the respective host country and the peculiarities of its own corporate sector, from which a relative measure of an MSME is made, sometimes on a rather arbitrary basis. Some countries distinguish between a micro and a small enterprise, while others subsume microenterprises under their SME
umbrella definition; yet others refer to micro and small enterprises as MSEs. In most cases, the definitions provided pertain to formally registered businesses, and exclude small-scale, informal family enterprises.
Figure 1.8: Indicators Used Among International, Regional and Local Sources
Source: USAID, 2007
In Figure 1.8 above, USAID illustrates 6 indicators applied by various agencies in 2007 to classify MSMEs. The number of employees was the indicator most cited. In Appendix 5 there are 35 definitions and categorisations identified in 23 Caribbean territories and 9 used by nine multilateral development organisations. This illustrates the extensive diversity, divergence and conflicts in the definitions and classifications attributed to MSMEs among Caribbean jurisdictions and international agencies serving the region. Following are the three (3) measurements most consistently used in selecting MSME beneficiaries in the Caribbean region: 1. Assets: MSMEs rarely have a precise estimate of the value of their fixed assets, and generally minimize them in environments where substantial asset taxes are imposed. Some government agencies evaluate fixed assets and land, while others use only fixed assets, thereby complicating cross-country comparisons.
2. Employment: Defining an MSME by the number of employees provides key data on the scale of its operations. This does not mean, however, that the larger an enterprise the more employees it will have. 3. Turnover: In general, the volume of turnover of a business is a more appropriate measure of its relative size than the number of employees or the value of assets. In Caribbean MSMEs, where profits, assets deployed and employees are often blurred by tax considerations, it is argued that annual sales constitute the single best measurement of business size. The pattern and rates of turnover also reflect functional and behavioural attributes. Only the most superficial of business services would not require an understanding of an entity’s sales in order to be effective. Mindful of the mediocre experience over the past 30 years with implementing development and credit programmes and with gathering empirical data for policy-related research, it was concluded that saving and creating sustainable jobs constitutes the single most important result desired from future