This new book systematically examines the current process for distressed Micro, Small and Medium Enterprises (MSMEs), and proposes a different, more appropriate, 'modular' approach to the treatment of such entities when faced with insolvency proceedings.
MSMEs play a vital role in virtually all global economies. They are a primary means by which entrepreneurs bring new business propositions to the market, and deliver a range of products and services to local economies. MSMEs tend to be more reliant on favourable legal and regulatory climates to survive and thrive than larger businesses, and insolvency regimes are often more tailored to these larger businesses, assuming an extensive insolvency estate of significant worth, and the presence of creditors and other concerned stakeholders to participate in and oversee the process. These assumptions and features are generally incongruous with the reality of MSMEs, for whom assets are of less value and whose stakeholders are generally more disinterested.
The modular approach proposed in this book addresses the imbalances, inconsistencies, and lack of supervision which is often apparent in treatment of insolvent MSMEs. It provides an overview of existing approaches to MSME insolvency, the place of MSMEs in the global economy, and the particular needs of MSMEs in financial distress. It then sets out the procedural framework, policy objectives, and key components of the modular approach, detailing how a choice of modules enables national policy-makers a more flexible process for resolution. It then outlines the roles, positions, and obligations of key stakeholder groups, and explains the managerial, administrative, and judicial functions of this approach. Finally, it explains how elements of the broader legal system should be aligned with, and supportive of, the optimal functioning of the modular approach.
This book reconsiders the treatment of distressed Micro, Small and Medium Enterprises (MSMEs). Recognising that insolvency systems traditionally suit larger enterprises, and that they do not always apply neatly to smaller entities, the book proposes a 'modular' approach designed to facilitate the treatment of smaller enterprises in distress.
This is an important book ... It represents the first, concerted effort to address the specific issue of MSME insolvency in a rigorous and scholarly framework, while offering a genuinely practical suggestion for the way forward. The controlling principles of the ground up approach and flexibility anchor the work, while due attention is paid to the incentives needed for a modular approach to work. The book is accessible, clearly written and clearly structured and avoids unnecessary jargon. Thus it is of use for academics, students, policy makers, regulators, international and industry bodies grappling with this important issue.
