Small and medium-sized enterprises (SMEs), are important contributors to economic growth and job creation, especially in the agricultural, commercial and light manufacturing sectors. However, these SMEs face many external and internal constraints, such as weak financial and internal management capacity, poor market linkages, poor Business Development Services (BDS), and inadequate access to finance. As a result, many SMEs fail to grow.
Transitional economies are characterized by this ‘missing middle’ of stable, mid-sized companies. These SMEs are too big to access capital from micro-finance institutions and too small to qualify for investments from commercial banks, and therefore stuck at a level where they remain vulnerable and unable to fulfill their potential as drivers of the local economy.
PSD aims to strengthen the capacities of business service providers and enable them to improve their business practices and their social capital. It also allows them to have improved knowledge and access to information access to business development support services