Despite the Asia and Pacific region’s unprecedented economic success and poverty reduction, income inequality is widening. Economic data suggests that a significant number of Asian countries have experienced increased income inequality over the past 2 decades. Small and medium size enterprises (SMEs) can play a major role in closing this divide. According to the SME Finance Forum, they are crucial for growth and job creation, accounting for nearly 86% of employment opportunities in developing countries. SMEs are seen to reduce income concentration with a disproportionate impact on minority or poor populations. This report gives a background on SMEs, its advantages, the barriers it faces and what it can do to help Asia's developing countries.