EDP Notes

The important characteristics of MSMEs are summarized as follows:
 They are generally organized and run by individual entrepreneurs.
 They require less capital.
 They are fundamentally labour-intensive units facilitating greater utilization of man
power.
 They involve the use of simple technology, intensive utilization of individual skill
leading to professional specialization.
 They cater the individual tastes and fashions and render personalized service to
consumers.
 They are highly localized industries. Using local resources MSMEs are decentralized
and dispersed to rural areas.
 They are eligible for govt. assistance and patronage and for concessional finance by
banks, financial institutions etc.
 They are flexible to a large extent. They are more susceptible to change and highly
reactive and receptive to socio-economic conditions.
 They are free from red-tapism and bureaucratic handicaps.
 Compared to large units, a MSME has a lesser gestation period. ie, the period after
which the on investment starts.