Unlocking the Potential of MSMEs in Arab States
Unlocking the Potential of MSMEs in Arab States
May 22, 2025
Micro, small and medium-sized enterprises (MSMEs) make up about 97 percent of businesses in Arab States and are important for creating jobs, reducing poverty and building economic resilience. Despite their importance, MSMEs face major challenges, including conflict, economic instability and barriers that limit their growth. Understanding what kinds of support work best, for whom and under what conditions is important for strengthening MSMEs, especially in fragile and crisis-affected areas.
This synthesis reviewed how UNDP supported MSMEs in Arab States. It explored what worked, what challenges emerged, and how support reached groups often at risk of being left behind, such as women, youth, refugees, internally displaced persons and people with disabilities.
The synthesis found that most UNDP support focused on micro-level interventions, helping youth and women, especially in fragile contexts. System-level work, such as market development and policy reforms, was more limited. Sector-based programmes, particularly in renewable energy, tourism and agriculture, achieved stronger outcomes when linked to national strategies. Efforts to improve market access and partner with larger companies supported business growth more sustainably. Digitalization and fintech initiatives showed promise but remained small in scale due to infrastructure challenges. Combining financial interventions (such as microfinance and grants) with skills development and market linkages strengthened results. Gender-sensitive approaches made MSME support more inclusive, although support for persons with disabilities was less common.
Linking enterprise-level support with broader system strengthening could help MSMEs grow more sustainably. Investments in market access, digital and financial services and partnerships with governments, financial institutions and private actors have the potential to contribute to stronger outcomes. Tailoring programmes to better reach marginalized groups, including persons with disabilities, could support more inclusive and resilient MSME ecosystems across Arab States.
The synthesis incorporated quantitative results from meta-analyses and narrative findings, visually summarized in two Evidence Gap Maps:
- Evidence Gap Map 1 provides insights into the distribution of evidence by outcomes, categorized by intervention type.
- Evidence Gap Map 2 illustrates the main barriers and facilitators impacting MSME interventions in Arab States.