Project Case Study
Conducting a study of micro, small, and medium enterprises in Yemen
Identifying the key characteristics, mapping the donors and recommending interventions of private sector development in Yemen
The Yemeni economy is comprised primarily of micro and small enterprises (SMEs), constituting 97% of recorded firms in the private sector, and over 90% of all employment in the country. Medium and large companies are few, with a heavy presence of state-owned enterprises. The 2011 upheavals hit the SME sector particularly hard. Jobs were lost, pay was cut and employees were forced to take unpaid leave for extended periods of time. As part of its vision for a more stable, secure and prosperous Yemen, DFID committed to providing the country with indirect support to the transition process by supporting the private sector to create jobs and increasing investment in the economy.
In 2013, we conducted an in-country scoping study for DFID to analyse the main barriers to SME development in Yemen, what current support is available and where any gaps lie. We carried out a political economy analysis, which identified a number of key characteristics of the private sector, and an extensive donor-mapping in the private sector arena, which demonstrated a current donor focus on microfinance and value chain development that was concentrated in the agricultural sector. Against this background, we were able to make a number of recommendations for potential DFID interventions, coupled with a balanced risk-analysis for each option, including a comprehensive table of the attractiveness and feasibility of implementing these interventions in Yemen’s 22 Governorates.
The recommendations our team made raised considerable interest and generated several ideas for supporting further development of the SME sector in Yemen.