This research clarifies the concept of small and medium enterprises (SMEs), its economic importance and studies the contribution of conventional banks in the financing, and the issues that prevent the arrival of the required funding to those facilities. Whereas many economists believe that the development of SMEs and encouraging its establishment is one of the most important tributaries of the economic and social development. It considers as a basic starting point to increase production capacity on the one hand, and to contribute solving the problems of poverty and unemployment on the other hand. Therefore, many countries increase its interests in these enterprises, and provided them with help and assistance in various ways, according to available possibilities. The most important findings of the research: -There is a strong positive correlation between the size of the traditional public and private credit facility banking granted to SMEs and GDP. -These facilities contribute by an important proportion in employment and foreign trade to the national economy. -These facilities share form a small percentage of the total volume of credit facilities granted by existed conventional banks, public and private. The research found several proposals, including: -To increase SMEs' access to various financing instruments in the market, in addition to develop and evaluate the effectiveness and the size of the funding mechanisms provided by the financial institutions, and to develop the operation system of local banks so that the system becomes more flexible, -To adopt a national standard definition of small and medium enterprises. - To advance the business environment of SMEs, which by consequence contributes in promoting and supporting its role in the national economy.