- Require relatively small capital investment to start.
- Offer relatively high labour to capital ratio.
- Improve forward and backward linkages between economically, socially and geographically diverse sectors.
- Breeding ground for entrepreneurial talent
- Act as ancillaries to large industries.
- Serve as training ground for local skills and entrepreneurs.
- Highly flexible operations.
- Positioned to absorb business shocks and adjust to business cycle.
- Usually sole proprietorships, partnerships entrepreneurs
- Labour intensive production processes
- Limited access to long term capital
- Limited assess to short term financing
- Finance when contrived is tethered to stringent conditionality
- Partnerships pursue individualistic goals at the expense of overall interest of SME’s
- Over dependence on imported raw materials and spare parts
- Highly flexible operations
- Positioned to absorb business shocks and adjust to business cycle.
- Poor inter and intra-sectoral linkages which results in the loss of benefits accruing from economies of large scale production
- Lack of management skills & technological advances resulting in low level of productivity and poor product quality
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