Dr. Muhammad Fayaz, Abdullah Emran

Volume 1 Issue 1 | Dec 2024

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Abstract

The contribution of small and medium-sized enterprises (SMEs) and informal enterprises constitutes about 70% of the GDP of developing nations. In Afghanistan, SMEs are independent entities that employ at least 250 individuals and possess a paid-up capital of at least 250 million Afghanis annually. They play a major role in the recovery and development of Afghanistan. This study used structural analysis based on secondary data available from the websites of regulatory bodies and past literature on this topic. The study's findings show that SMEs play a crucial role in contributing to GDP, fostering local entrepreneurship, and promoting innovation despite facing obstacles such as insufficient infrastructure, political instability, restricted access to financing, and regulatory challenges. The study underscores the necessity of implementing policy reforms, establishing financial support systems, and initiating capacity-building programs to empower SMEs, thus enhancing their contribution to sustainable development and recovery in post-conflict scenarios. There is a need to strengthen the SME sector through capacity-building programs, supportive policies, and improved market access. Such steps can strengthen Afghanistan's economic resilience and self-reliance.
Keywords: Small and Medium-sized Enterprises (SMEs), Entrepreneurship, GDP, Economic Growth, Development