Identifying Barriers to the Development of Small and Medium Enterprises (SMEs) in Afghanistan

The purpose of this study is to identify the internal or external factors which hinders the SMEs development in developing countries especially in Afghanistan. At the same time, to effectively manage the challenges it is indispensable to determine the barriers that negatively impacts SMEs development as much as to be helpful to entrepreneurs. To categorize these factors, it is appropriate to conduct an explanatory analysis. The data is collected through questionnaire by applying a survey approximately 150 employees, managers and entrepreneurs working in SMEs.. The obtained data is analyzed or evaluated with the help of Statistical Package for Social Sciences (SPSS). In the study, firstly, correlation analysis was used. According to the results attained in the study indicates, that the most significant obstacles to SMEs development in Afghanistan includes political instability, insufficient energy supply, infrastructural deficiencies, and limited access to financial resources. Nowadays, SMEs play a crucial role in the economic activities of most countries. In this case, it is considered more significant to clarify main factors which hinders SMEs development in Afghanistan. Because SMEs creates a significant portion of jobs and it also play an essential role in improving income distribution in less developed societies especially in Afghanistan. But it also possesses the potential to transform into large scale enterprises in the medium and long term.