Background and Institutional Framework

MSMEs are widely recognized for the important contributions they make to sustainable development, in terms of contributions to economic growth, creation of decent jobs, provision of public goods and services, as well as poverty alleviation and reduced inequality. MSMEs comprise a major share of total private sector entities in both developed and developing countries. 

Statistics on MSMEs are scarce, in particular as most are active in the informal sector. Surveys indicate that MSMEs in the Asia-Pacific region comprise 98 per cent of all enterprises and employ 50 per cent of the workforce. They contribute from about 17 per cent to national GDP in low-income countries including India to about 40 to 50 per cent in the higher income countries such as Malaysia and Singapore. MSMEs account for over 90 per cent of licensed companies in the Asia-Pacific region.1 Generally, MSMEs increase production and exports and facilitate income growth while providing fertile ground for enterprise development.


1 ADB has found that SMEs contributed on average 30 per cent of total export value in Asia in the period 2007– 2012. ADB (2013), Asia SME Finance Monitor (ASM), p.5.