Abstract: This comparative study examined the policies and challenges of SMEs operating in Zimbabwe and South Korea. Data were collected using focus group discussions, document analysis, interviews and observations. The sample of the study constitutes of SMEs operating in urban areas of Seoul and Ansan, Harare and Chinhoyi of South Korea and Zimbabwe respectively. The major findings revealed that SMEs in the two countries face similar major challenges what differs is that they operate in different policy environments. This research concludes that South Korea’s policies are more supportive to the SMEs sector and hence has led to a miracle economic growth as well as lower mortality rate of SMEs in South Korea while Zimbabwe’s policies are less supportive resulting in higher failure rate of SMEs. The study recommends an econometric investigation of the utility of the traditional production model in SMEs in the two economies. The economic model {Q=f (K, L)} states that growth (Q) is a function of Technology (K) and Labour (L).