The role or contribution of small and medium enterprises (SMEs) to the economy includes the following: (1) generation of employment and income growth; (2) stimulation of entrepreneurship and innovation; (3) expansion and diversification of markets; (4) urban-rural dispersing and community stability; (5) increasing savings rate and investment base; (6) alleviation of threats for survival of the poor; and (7) promotion of pluralist society. The SME sector, thus, serves as the crucial link to the seemingly incongruous paradigms of the growth-led and equity-led development strategies. If real economic progress is to be achieved, these strategies should be complementary.
