As the world celebrates International MSME Day, it is crucial to recognise the significant role that Micro, Small, and Medium Enterprises (MSMEs) play in the Maldivian economy. According to the Household Income and Expenditure Survey (HIES) 2019, small enterprises in the Maldives are a vibrant and essential part of the economic landscape, providing employment and contributing substantially to local communities.
What Makes an MSME?
Micro, Small, and Medium Enterprises (MSMEs) are categorised based on their size and scale of operations. According to the Micro, Small, and Medium Enterprises Law (Law No: 6/2013) in the Maldives, MSMEs are classified by the number of full-time employees and their annual income or turnover. The classifications are as follows:
– Micro Enterprise: 0 to 5 full-time employees, with an annual income or turnover of up to MVR 500,000.
– Small Enterprise: 6 to 30 full-time employees, with an annual income or turnover between MVR 500,001 to MVR 5 million.
– Medium Enterprise: 31 to 100 full-time employees, with an annual income or turnover between MVR 5,000,001 to MVR 20 million.
In the HIES 2019 survey context, small enterprises are defined as those with fewer than ten persons engaged without considering annual income or turnover.
Overview of Small Enterprises in the Maldives
The HIES 2019 survey identified 40,232 small enterprises across the Maldives. A striking 85% of these are self-employed workers, and 10% are employers. The geographical distribution is noteworthy, with 38% of small enterprises located in Malé and 62% spread across the atolls.
Economic Contributions
Small enterprises are integral to the Maldivian economy, contributing significantly to employment and revenue generation. They account for 26% of total employment, engaging 47,607 individuals. Males dominate this sector with a 55% share, while females make up 45%. Moreover, 86% of the workforce in small enterprises are locals, with the remaining 14% being foreign workers.
The financial landscape of small enterprises is diverse. On average, a small business spends MVR 5,560 per month per employee. The total monthly revenue these businesses generate is MVR 709 million, with an average monthly income of MVR 22,618 per enterprise. The total reported expenditure is MVR 504.7 million, leading to a collective profit of MVR 203.2 million. According to GDP estimates, these enterprises also add MVR 358.6 million to the Gross Value Added (GVA), representing 5.7% of the 2019 GVA.
Industry Distribution and Business Operations
The small enterprise sector is diverse, with 40% engaged in manufacturing and 62% operating year-round. A significant portion, 57%, run their businesses from home, while 21% do not have a fixed location. However, registration remains challenging, with 74% of small enterprises operating informally.
Demographics and Workforce
The demographic distribution of small entrepreneurs is varied. Youths constitute 28%, adults 66%, and the elderly 6%. Women own 52% of these enterprises, highlighting a significant female presence in the business landscape. Educationally, 58% of entrepreneurs have no formal certification, while 15% have completed O’ Level, 2% A’ Level, and 9% hold a Bachelor’s degree or higher.
Challenges and Opportunities
Despite their contributions, small enterprises face several challenges, including formal registration and scalability. However, the Maldivian government has streamlined the registration process through the SME Registry Business Portal, managed by the Ministry of Economic Development.
Steps to Register as an MSME in the Maldives:
1. Visit the SME Registry Business Portal: The official website provides comprehensive information and instructions.
2. Fill out and submit the registration form: Ensure all information is accurate and complete.
3. Await confirmation and approval: The authorities will review the submission and may request additional information.
Celebrating International MSME Day: A Look at Small Enterprises in the Maldives This certificate proves the business’s MSME status.
For more information or assistance on MSME registration, contact business@1500help.mv
On this International MSME Day, it’s essential to recognise the substantial impact of small enterprises in the Maldives. These businesses not only fuel the economy but also foster innovation, provide employment, and support community development. As we look to the future, strengthening the support for MSMEs through better policies, easier access to resources, and increased visibility will be key to ensuring their continued growth and success. The resilience and entrepreneurial spirit of small enterprises are vital to the dynamic and diverse economic fabric of the Maldives. By empowering these businesses, we are investing in a prosperous and inclusive future for the nation.
