Despite the growing attention given to the development of small and medium enterprises (SMEs) in MENA countries, their competitiveness is still limited. This paper discusses the relative importance of SMEs in five MENA countries; namely, Bahrain, Egypt, Jordan, Lebanon and the Syrian Arab Republic, and tries to identify the main problems that hinder their growth and efficiency. It also assesses the support services provided by SMEs’ support institutions. The paper relies partly on the results of structured interviews carried out on a sample of manufacturing firms in these countries. The analysis shows that SMEs are suffering from very limited business development services (BDS), especially in the area of training, business information and marketing services. The assessment of BDS in the selected countries showed that training programs are not effectively reaching the small entrepreneurs and are often prepared without serious identification of problems faced by entrepreneurs. SMEs are also either lacking advisory and counseling services, or they are unaware of the existence of support institutions and of their services. Information services provided in the region are scattered, incomplete and difficult to access. Marketing services are also scarce and benefits large firms more. The paper concludes that the business development services organizations need to introduce major changes in their management, structure and approach of work, in order to meet effectively the real needs of SMEs.