Small and medium enterprises (SMES) and their role in economic and social development

Abstract

The characteristics of small and medium enterprises are generalized. The essence and the role of small and medium enterprises for the country’s economy are defined. The existent difficulties in the development of small and medium enterprises are identified. The peculiarities of financing small and medium enterprises by the banks of Libya are specified and the influence of such financing on social-economic development of the state is assessed. Small and medium enterprises (SMEs) hold an important position in the economies of developing countries, as constituting the vast majority of industrial facilities in general, though varied proportions and nature of the country from one to another. Nevertheless, the majority of developing countries spent huge funds into the development of industries, especially heavy ones, as concern to construction of industrial machines and large factories, which attracted a large share of industrial investments in the late eighties of the last century. But with the beginning of this century, there was a significant shift in the field of investments; – there came an interest in SMEs because of their income to the national profit. And that was proved by most trials and studies that appeared in some communities, which highlighted the importance of SMEs and their effective participation in economic and social development, in addition to their active export activity across regional and international markets after they became capable to provide products distinguishing in terms of quality and price. And that is why they are considered to be the cornerstone of economic and social development process, due to their positive economic impact on national economy in terms of the leading role in providing new job opportunities, and achieving the growing increase in the amount of investments. The study has also resulted in some recommendations that might contribute more onto better achievements in economic and social growth rates: To develop a specific definition of SMEs commensurate with the requirements of the development and the role expected from these enterprises in the next phase, so that this definition could correspond with contemporary technological developments. To alleviate complex and restrictive regulations and laws for SMEs, such as laws relating to customs duties and taxes encourage such projects. Create a foundation (an agency) for the development of SMEs for overseeing all institutions that specialize in servicing these enterprises both in terms of funding them and providing advice, consultation and support. The definition of the prominent role of SMEs and of the methods used for financing operations through conferences and seminars explain that.

Узагальнено характеристики малих та середніх підприємств; визначено їх роль у розвитку економіки країни; ідентифіковано труднощі, що існують у розвитку малих та середніх підприємств; установлено особливості здійснення фінансування малих і середніх підприємств фінансовими установами Лівії та визначено вплив такого фінансування на соціально-економічний розвиток країни.