Most SMEs are destined to stay small

Given M2i’s positioning we get to work with a variety of small businesses – some fairly large small businesses attracting private equity and commercial funding, and some really small-small businesses backed by subsidies and donor funds. Among the latter, some are formally organized with appropriate registrations while many, in fact most, are informal enterprises with minimal registration – although a return is filed with the Income Tax Department. Business failure appears to be higher in those cases which have registrations and are required to comply with a number of regulations. Also, there is a reluctance among the entrepreneurs to grow a single enterprise, they’d rather divide their business and have several sole-proprietorships under various names, all engaged in the same business.