A key issue for Kosovo’s economic future is how to provide the maximum benefit for local enterprises through the liberalization and globalization of product markets. Data from the Ministry of Trade and Industry clearly show that most enterprises in Kosovo are of micro, small and medium size and the problems they face fall into two categories: the first one is to determine if they can participate in production for local and regional markets or do they remain excluded? And the second one is related to the fact that our economy is facing high levels of trade deficit, which continues to have a negative impact on economic growth, and because our SMEs are mainly based on trade and services, they have limited capacities to create added value to the economy and generate new jobs. In addition to addressing the questions, the paper tries to provide a thorough explanation of ways of enhancing the competitiveness of SMEs in rural areas of Kosovo based on the field study, research reports, country strategies and views of several scholars. Recent studies have proved the relation and impact of SMEs in the development of rural areas. The paper is divided into three sections and ends with a conclusion. The first section reviews the different usage of the terms SMEs from different theories and dimensions. The second section deals with the results of 308 interviews randomly conducted all around Kosovo. In addition the questionnaire was prepared and tested in advance in order to avoid any useless questions, and to provide information regarding the types, reasons, and the problems that the SMEs are facing. The paper concludes with some personal reflections and conclusions drawn on this topic.