Responding to a post last week on possible metrics for defining SMEs, blog reader Nadezhda expressed some concerns in the comments section. Nadezhda argues that trying to come up with a universal definition for SMEs gets the whole thing backwards. Instead:
We need instead to start with "why do we think SMEs are important but need attention" and work from there. As your survey of endless studies suggests, the answer will be different depending on factors like how developed an economy is, how formal or informal the "SME sector" is, are we dealing with agriculture, manufactures, services, tradeables, etc. The answer will also be different depending on the specific policy context -- the things that make SMEs "special" are different depending on whether we're trying to address financial services or labor conditions or environmental standards or consumer safety, etc etc.
So IFC should go back to what (some of it) was trying to do internally about a decade ago before the SME fetish took hold (because it was easier to market to donors and scale up high-profile, big money "SME" programs than to fold a lot of differentiated services and solutions under an "access to financial services" umbrella)...
Read the rest of the comment here.