Abstract:
Small and medium enterprises (SMEs) are generally thought to play a
crucial role in driving economic growth in both developing and developed
countries. They have the ability to answer in a flexible way to the competitive
markets and to adapt to the structural and cyclical changes of the global
economy. In the same time, the small businesses should be considered the
force capable to lead to a better allocation of resources, introduction of new
ideas and innovative products, new business methods, to generate more new
jobs than large firms and they can push economic reform and the
modernization of economies. Therefore is necessary to be done a research in
order to find out what impact these enterprises have on growth and poverty
or how such impact occurs. The analysis was based on a study regarding the
rural SMEs, encouraging insights on the potential of these firms as a vehicle
for growth and poverty reduction and some policy guidelines for the design
of interventions to maximize this potential. The economic impact of
investment in SMEs is significant, all the analyzed firms have achieved a
significant positive economic rate of return. Also, new jobs were created and
the enterprises provide substantial non-salary benefits. Many of these
enterprises invest in training their workers during employment and this
creates a substantial asset for employees, as it permits wage increases and a
skill premium. As well, employees benefit from the stability of employment.
Through investment, the rural SMEs introduce new business methods,
products, and services which can lead to the restructuring of the agricultural
sector. The rural SMEs help spread the benefits of economic growth by
engaging low-income groups in national development. As well, they form
dynamic supply-chain linkages between small-scale producers and lucrative
urban, national, or export markets. In the reverse direction, they link large
urban businesses with mass consumer markets. All these results suggest that
it is well worthwhile for the development community and for the investors to
put more effort into SME financing.
