<b>Review of Historical and Temporary Challenges Facing Small and Medium Enterprises in Yemen</b> This paper aims at shedding the light on the obstacles and challenges that hamper the performance and contribution of small and medium enterprises in Yemen and their contribution to the economic development. It is based on an in depth review of international organizations reports about Yemen and the development of the business sector, reports on the performance of small enterprises and business environment during the current condition. The challenges that face small businesses in Yemen are serious and they need years if not decades to be contained from hampering the business performance and the contribution to GDP. These challenges are grouped into two sets, the first set is concerned about the historical challenges that had been facing SMEs for long time, and the other set is concerned about the emerging challenges that came to affect the small business sector in recent year with the emergence of the violent conflict and political instability Yemen, SMEs, challenges, business, development 752-764 Issue-3 Volume-4 Mugaahed Abdu Kaid Saleh | Dr. Manjunath K. R.