Defining Small and Medium Enterprises (SMEs)
Malaysian SMEs can be grouped into three categories : Micro, Small, or Medium.
These groupings are decided based on
- EITHER the numbers of people a business employs
- OR on the total sales or revenue generated by a business in a year.
I. Number of Employees
Based on the number of full-time employees:
| Primary Agriculture | Manufacturing (including Agro-Based) & MRS* | Services Sector (including ICT**) | |
| Micro | Less than 5 employees | Less than 5 employees | Less than 5 employees |
| Small | Between 5 & 19 employees | Between 5 & 50 employees | Between 5 & 19 employees |
| Medium | Between 20 & 50 employees | Between 51 & 150 employees | Between 20 & 50 employees |
*MRS: Manufacturing-Related Services
**ICT: Information and Communications Technology
II. Annual Sales Turnover
Based on annual sales turnover:
| Primary Agriculture | Manufacturing (including Agro-Based) & MRS* | Services Sector (including ICT**) | |
| Micro | Less than RM200,000 | Less than RM250,000 | Less than RM200,000 |
| Small | Between RM200,000 & less than RM1 million | Between RM250,000 & less than RM10 million | Between RM200,000 & less than RM1 million |
| Medium | Between RM1 million & RM5 million | Between RM10 million & RM25 million | Between RM1 million & RM5 million |
*MRS: Manufacturing-Related Services
**ICT: Information and Communications Technology
Background on SME Definitions
In 2005, the National SME Development Council (NSDC) approved the use of common definitions for SMEs in the manufacturing, manufacturing-related services, primary agriculture and services sectors.*** These definitions are applied by all Government Ministries and Agencies involved in SME development, as well as by the financial institutions.
The use of common definitions for SMEs will:
- strengthen government efforts to create effective policies and support programmes for specific target;
- make it easier to provide technical and financial assistance to SMEs; and
- allow for the identification of SMEs in the various categories and levels.
To view the Guidelines on "Definitions for SMEs in Malaysia", which was released by the Secretariat to National SME Development Council, Bank Negara Malaysia on 13 September 2005, please click on the link below:
*** Classification of economic activities is based on the Malaysian Standard Industrial Classification (MSIC) 2000 codes.
