The Yemen national strategy for small and micro enterprises (SME) development was approved by the council of Ministers on January 17, 2005. It included the establishment of a national agency to promote small and micro enterprises (The Small Micro Enterprise Promotion Service - SMEPS). SMEPS will be responsible for directing and coordinating activities to provide improved non-financial services for SMEs by planning, directing, coordinating and monitoring several programs with partner organizations. The programs will be aimed at stimulating growth and diversity within the SME sector.

 The relevance of SMEPS to SME development in Yemen is built upon two key realities. These are that Yemen's economy lacks diversification and growth. The great bulk of SMEs are crowded into a few similar sub-sectors such as retail, taxis, telecoms bureaus, restaurants etc. and competition amongst them is intense. Yemeni entrepreneurs generally seem reluctant to diversify into new sub-sectors even if they have the capital to do so. The reason seems to be the lack of marketing and technical confidence and skills.

 Improved provision of non-financial services (business development services ? BDS) to SMEs, particularly in marketing, new line development, market access and technical fields including training is needed and desired by SMEs themselves. The more successful SME owner often 'toys' with the idea of investing into additional business projects, but lack ideas and confidence.

Through a wide array of interventions SMEPS aims at providing SMEs with adequate tools to facilitate their growth and diversification. These interventions are listed below:

 - New Business Lines

 - Sub-sector studies (value chain analysis)

- Technical Advisory Stations (TAS) 

- Upgrading training

- Curricula development for vocational/technical institutes 

-Upgrading consultancy services ? links to SMEs 

- Handicrafts Export Promotion Project 

The interventions listed above are managed/ facilitated by SMEPS. SMEPS policy is to build markets in the area of BDS to SMEs, thus the emphasis is on private and public sector service providers delivering the consultancy, training, information, and marketing services at the very minimum at cost recovery - over time growing into profitable business services. Thus SMEPS itself does not provide BDS, rather SMEPS facilitates the provision of BDS.