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SCMS Centre for Research on
‘Micro Enterprise Management’

Micro-enterprise and micro-finance development have emerged as major strategies to combat the twin issues of poverty and unemployment that continue to pose a major threat to the polity and economy of both the developed and developing countries. Micro Enterprise Development is viewed as an opportunity for providing gainful employment to the people below poverty line and thereby improving their income and living standard. During early 70’s growth of Micro Enterprise has resulted largely from the lack of alternative employment opportunity but now micro enterprise is considered as a growth engine that triggers developmental process.

Micro enterprise – definition
Micro enterprise generally includes, in particular, self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity.

In India, Micro enterprise is defined (in the urban context) based on the following criteria:
   
I Investment ranging from Rs 5,000 to Rs 2.5 lakhs
II Enterprise should have a potential to generate at least Rs 1,500 per member per month either by way of wage or profit or both together.
III Enterprise fully owned, managed and operated by members themselves, preferably, women below poverty line families as entrepreneurs.
IV A minimum turn over of Rs 1 lakh to Rs 5 lakhs. (ie 2-10 times of the capital investment).
 
Micro enterprise development is an emerging process, which will start with low capital low risk and low profit at the initial stage, which will gain momentum and later switch on to low to medium capital and then to low to medium risk. In an advanced stage it may even reach medium capital medium risk and medium profit with appropriate technology, emerging technology or even with low technology.

Scope of Research
There is a growing concern that micro-enterprise development programmes are not successful to the desired extent because of the lack of adequate and timely availability of credit. The missing link is that micro-enterprise and micro-finance, more often than not, have been dealt with, in isolation without any synergy between the two. Another problem faced by the micro enterprises is that they are finding it very difficult to face the competition from the well established business firms enjoying the so-called ‘economies of scale’ They are going to find their future even darker in the absence of innovation, which is highly important as far as competitiveness and productivity levels are concerned. The people entering this field of economic activity are generally unskilled. Their lack of skill and experience in the field of business and management makes it all the more difficult for them to make their venture a success.

In the Kerala context, the word micro enterprise has become synonymous with Self Help Groups. This has become a mass movement which has played a great role in the empowerment (Both financial and social) of women belonging to the poverty line stratum. Many of the SHGs have been successful in manging microenterprises while a few have been unsuccessful.

Research Issues identified by SCMS for future research:
Features of successful SHGs
Features of failed SHGs
Strategy planning in SHGs
Contribution of SHGs to poverty alleviation
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