Micro and Small Enterprises in Lebanon

Similar to most countries in the region, economic growth and technological progress have been slow in Lebanon, with a predominance of small scale enterprises in the economy. The private sector has traditionally been a major partner in the development of the country, also with a dominance of micro and small enterprises that constitute the bulk of private sector activity. Thus, the MSE sector (i.e. Micro and Small enterprises) has the potential to provide substantive support to the development of the country in the medium and long terms. This is especially true as a large proportion of new jobs generated are in the informal sector which is characterized by low productivity, poor working conditions, and high vulnerability to shocks. The main objective of the study is to expand the knowledge of the economic and social characteristics under which the MSEs and the informal sector operate in Lebanon in order to address its contribution to growth and employment generation, especially for the poor. In this context, the study examines the sectors’ current status, existing constraints and potential for growth. This enhanced understanding is expected to permit an expansion in policies and programs that would allow this sector to fulfill its potential growth with expected spin-off effects on the national economy. Such a framework is crucial, especially given the substantial share of the said sector in the Lebanese economy and in light of the changing environment towards globalization and trade liberalization. The latter trends present a threat to traditional incomes and to the livelihoods of a major disadvantaged segment of society. The study specifically intends to provide insights into the factors determining the competitiveness of MSEs, suggest effective ways for the involvement of the various government levels to support higher  income and competitiveness of the sector, identify constraints and potential linkages with the formal private sector, and determine gender differences in the sector.