There is less empirical evidence on MSMEs growth in developing and emerging economies than in the developed world. MSMEs in developing and developed countries are faced with different challenges. Many MSMEs in developing countries are still informally organized enterprises limiting their longevity and wider contributions they make towards the SDGs. There are also questions on how formalization of the economy ought to take place.
Moreover, demands and challenges vary within the micro, small and medium enterprises cluster itself demands and challenges faced by micro enterprises are different from those faced by small and medium enterprises. Studies show that the growth of MSMEs in developing and least developed countries (LDCs) dominate in sectors which are labor intensive and possess low barriers to entry, including agriculture and agribusiness, manufacturing and service sector.
Women, youth and other vulnerable groups face more difficult challenges in MSME development. Women and youth MSME entrepreneurs, for example, particularly those from rural poor communities, are often further disadvantaged in growing their business, lacking land deeds and/or collateral needed to access formal sources of credit.
Other challenges include limited access to finance and lack of capacity and knowledge, particularly with regards to business development, marketing and strategic management skills (Read more…).