The Role of Entrepreneurship Development in Reducing Poverty in Post-Conflict Settings: Evidence from Mogadishu, Somalia

Abstract Entrepreneurship is widely recognized as a key driver of economic growth, employment creation, and social development, particularly in developing and post-conflict contexts. This study examines the impact of entrepreneurial development on poverty reduction in Mogadishu, Somalia, with a specific focus on the differential effects of small and medium-sized entrepreneurship. The study employs a quantitative research design, utilizing a convenience sampling technique. Data were collected from 92 respondents, comprising owners of small and medium-sized enterprises (SMEs) and aspiring entrepreneurs, through structured questionnaires. The data were analyzed using SmartPLS to assess both the measurement model and the structural equation model. The results reveal a significant positive relationship between the development of medium-sized entrepreneurship and poverty reduction, indicating the crucial role of medium-sized enterprises in generating employment and enhancing income levels. However, the development of small entrepreneurship did not show a statistically significant effect on poverty reduction. These findings suggest that medium-sized enterprises have a greater capacity to contribute to sustainable poverty reduction in the study context. This study contributes empirical evidence from Somalia, a fragile and under-researched context, by distinguishing between the poverty-reduction effects of small and medium-sized enterprises. The findings offer valuable insights for policymakers and development practitioners seeking to design targeted SME-support interventions to alleviate poverty.