During the last three decades, there has been a growing interest in the role of Micro and
Small Enterprises (MSEs) as engines of economic development and pro-poor growth. In
Bolivia, MSEs are the main source of employment but have alarmingly low levels of
productivity. Therefore, the purpose of this study was to seek for an explanation of the
relevance of MSEs´ growth in the Bolivian context as well as to understand the different
factors affecting its performance. In order to conduct the analysis, a mixed methods
approach primarily based on quantitative data analysis was used.
On the basis of the analysis, it was concluded that MSEs´ growth has a direct impact on
employment levels in Bolivia and MSEs are thus an important tool in the fight against
unemployment. Results also showed that Bolivian MSEs are characterized by a relatively
low use of external financing, poor levels of expenditure on fixed assets, technology and
quality, and an intensive use of unqualified labour as their main resource to achieve results,
all of which negatively affects their productivity. Additionally, it was found that the
environment is not conductive for business development and it constrains MSE´s
performance and growth