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The main objective of this study was to identify the importance of SMEs in Malaysian and Pakistani economies. Small and Medium Enterprises (SMEs) play a vital role in the development and growth of the Malaysian and Pakistani economies. However, their contribution to the national economies of both countries is still relatively small. Malaysian and Pakistani governments have made various fundamental steps to improve the growth of SMEs. In spite of this, SMEs are still facing heaps of challenges and obstacles that deter them from further expanding their businesses and sustainable growth. This study provides the review of the importance of SMEs in Malaysia and Pakistan.