Small and Medium Enterprises (SMEs) are the backbone of Bangladesh's economy, contributing significantly to GDP, employment generation, and poverty reduction. Characterized by their relatively smaller scale of operations and limited resources, SMEs include a wide range of businesses from manufacturing units and service providers to trading establishments. They are often defined by criteria such as investment in plant and machinery, and annual turnover, varying across different sectors.

These enterprises are crucial for fostering local innovation, promoting regional development, and creating opportunities for a large segment of the population, including women entrepreneurs. They play a vital role in diversified economic growth and industrialization, adapting quickly to market changes and serving niche markets.

Key sectors where SMEs thrive in Bangladesh include readymade garments, leather and leather products, agro-processing, light engineering, pharmaceuticals, and various service industries. Their dynamic nature makes them central to achieving the country's economic development goals.