Benefits and requirements for MSMEs

According to the National Administrative Department of Statistics (DANE), micro, small and medium-sized enterprises (also known as MSMEs) account for 35% of Colombia’s gross domestic product, generate 80% of the jobs offered in the country and constitute 90% of Colombia’s productive sector.

Not surprisingly, the government is focused on helping this sector grow and strengthen.

This has been demonstrated since the creation of Law 590 of 2000, which establishes the definition of these companies and the benefits they offer.

Also, Law 905 of 2004, which modifies the previous law, but in search of a better promotion for this sector.

In this opportunity we want to talk about MSMEs, what are the requirements that people need to create one and what benefits they receive to improve their business.

Requirements to be classified as MSMEs

According to the aforementioned laws and also based on Law 1450 of 2011, there are two requirements to be classified as MSMEs: The value of assets and the number of employees.

The value of assets

Asset value is defined as the average invoiced value of the last three closed business or fiscal years.

If the company does not have this age, only information from closed business years or fiscal years will be taken into account.

The number of employees

This is a new requirement, and it is the number of employees hired during the last three business or fiscal years closed.

In the absence of seniority, the employees hired during the business years or fiscal years that have been closed will be taken into account.

With this in mind a business can be classified:

  1. Microenterprise: all businesses with up to 10 employees and assets of less than 500 minimum legal monthly salaries in force (SMMLV).
  2. Small companies: all businesses with between 11 and 50 employees and assets between 501 and 5,000 SMMLV.
  3. Medium-sized companies: all businesses with between 51 and 200 employees and assets between 5,001 and 30,000 SMMLV.

Benefits for MSMEs

To help improve these companies, the Colombian government offers a series of benefits, among which are the following:

Lines of credit and financing

The Colombian government created several entities and funds to help MSMEs to finance themselves and improve their productivity.

Among these entities are:

  • Bancóldex, Development Bank of the Colombian Government.
  • FOMIPYME, Fund for the Development and Modernization of SMEs.
  • Programs such as ACOPI and FINDITER to assist business development.

For their part, the different private banking entities offer plans, funds and services dedicated to the development of MSMEs, so the user can consult them and choose the one he/she believes to be most beneficial.

Guarantees to access credit

The Fondo Nacional de Garantías allows these businesses to acquire a percentage of the loan requested even if they do not have the guarantees required by the entity.

This is intended to help businesses achieve the requested value and thus improve their business.

This service can be requested by the businessmen at the bank where they are processing their transactions.

Support programs

These programs seek to provide advice to entrepreneurs who are interested in growing and improving the productivity of their businesses.

Among those that stand out are:

  • iNNpulsa Colombia created by the Ministry of Commerce, Industry and Tourism.
  • Productive Transformation Program (PTP).
  • The More Productivity program.
  • and digital MSMEs.

In a nutshell

Colombia is seeking to strengthen the MSME sector, as these companies currently represent a substantial part of productivity and employment generation in the country.

Being under these modalities offers great benefits to users that allow them to create, innovate and improve their own business and thus earn a legitimate economic livelihood.