Growing a diverse and competitive Small and Medium Enterprises (SME) sector is considered as one of the critical factors towards achieving sustainable economic growth. Some advanced economies have succeeded in this regard because SMEs form a fundamental part of their economies. In such economies, SME comprise more than 98 per cent of the total establishments and contribute more than 65 per cent of employment. Globally, SME contribute more than 50 per cent to the Gross Domestic Product (GDP) in developed countries.
Further, SME also constitute 95 per cent of registered firms in the world. Specifically in the European Union, SME constitute 99.8 per cent of all firms and employ around 76 million people representing around 67.4 per cent of total employment in 2010. In the US, SME constituted more than 50 per cent of the non-farm private GDP and created 75 per cent net new jobs in the economy.