Policies for Small and Medium Sized Enterprises Development in the Republic of Moldova: Results and Challenges

Abstract

Small and medium sized enterprises (SMEs) are the main force for economic growth, but at the same time an extremely vulnerable sector, which constantly needs support from the state. Thus, one of the basic tasks in the state regulation of the activity of this sector involves the development of policies aimed to support small and medium business. This study attempted to analyze promoted policies for the development of SMEs in the Republic of Moldova, focusing on achievements, but also on the remaining deficiencies in their development. We noticed that the policies promoted over the years have resulted in a series of positive achievements, such as increasing the contribution of the SMEs to Gross Domestic Product, multiplying the number of SMEs and the workforce employed in these enterprises. At the same time, based on this analytical approach, it has been found that leading challenges for SMEs development include heavy regulatory framework, lack of diverse financing sources and high costs of infrastructure, global competition and lack of technologic and managerial capabilities. Further, this research includes recommendations for overcoming these challenges and identifying requirements for the long-run development of the SMEs. The current study has been drawn up, using the official data offered by the National Bureau of Statistics, Organization for Small and Medium-Sized Enterprises Sector Development, the Ministry of Economy from the Republic of Moldova, World Bank reports Doing Business, International Monetary Fund (IMF) reports, Organization for Economic Cooperation and Development (OECD) reports, and the most recent references in this field of research. DOI: 10.5171/2022.706025