The Role of SMEs in Capital Formation, Equitable Growth and Income Distribution in Developing Countries

The expansion of a productive private sector is one of the critical concerns of the economic development in developing countries in order to increase gross domestic capital formation (GDCF) to alleviate poverty. Private sector development may take many different forms, but the results may be quite different in terms of equitable development and social inclusiveness. One of the most efficient ways of private sector development is the promotion of SMEs instead of large firms. In the research unbalanced capital formation is used as the research theory. To complete the research intersectoral linkages used as the research methodology. There are ample kinds of evidences concerning the role of SME in capital formation in developing countries.