Small and medium forest enterprises (SMFEs) in Mozambique account for 95.8% of the formally registered enterprises in the forest sector and more than 99.9% of the enterprise numbers if the predominant informal enterprises are included. Total forest sector employment exceeds 600,000 people, 80% of which is based in SMFEs. Despite their significance to the economy and potential for sustainability and poverty reduction, SMFEs are poorly catered for by national policies and programmes. At present, the two formal channels for commercial timber production – 50 year forest concessions and annual simple licenses – are inaccessible to the more socially responsible forms of community-based SMFE that might bring about greater sustainability and poverty reduction. While 180 communities had secured their land by 2005, they have no easy means to develop commercial enterprises from the forests on that land. Legislation still views community based natural resource management as a process of subservient partnership between external forest enterprises and community management committees. Despite these challenges, there are a wide range of Mozambican programmes spanning government, civil society and private sector initiatives that support SMFEs. This report makes the case that a more coordinated effort is urgently needed between these programmes to develop business skills and capacity among SMFEs.