Managerial Challenges and Performance of Small and Medium Enterprises in Yemen

Abstract: Small and Medium Enterprises (SMEs) represent a vital component of Yemen’s economic landscape, yet their growth and sustainability are severely hindered by managerial challenges. This study investigates the influence of managerial obstacles on SME performance, drawing on survey data from 394 enterprises in Sana’a and other cities. Using a descriptive-analytical method, management challenge scales from OECD and World Bank sources were applied, with data analyzed through SPSS. The findings reveal that deficiencies in skilled workforce (β = -0.317), administrative management practices (β = -0.235), record-keeping systems (β = -0.199), and limited business networks (β = -0.120) significantly undermine SME performance. Conversely, employee training exhibited a positive effect (β = 0.159), underscoring the value of capacity development. Surprisingly, factors such as innovation, market knowledge, and operational experience showed no significant impact. The results highlight the urgent need for targeted interventions, including structured training programs, improved administrative frameworks, and supportive institutional mechanisms. Establishing a supervisory authority dedicated to SME development is recommended to address these constraints and strengthen Yemen’s economic resilience.