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Small-to-medium-sized forest enterprises (SMFEs) offer numerous benefits to rural communities and society as a whole. Less attention has been paid to the sustainability of SMFEs in terms of improving the livelihood of rural communities. This study aims to assess the impact of SMFEs in Khyber-Pakhtunkhwa (KPK), Pakistan, and evaluate their potential role in reducing poverty and promoting rural livelihoods. Primary data were collected from 350 household heads and analyzed using econometric methodologies: The ordinary least squares (OLS) and ordered logit model. Household income, a wealth index, and five capitals of sustainable livelihood have been considered to gauge the impact of SMFEs. The results of the study reveal that there is a strong positive association between SMFEs and improvement in a rural community’s livelihood. The results further showed that households engaged in SMFE-related activities earn 3% more income and possess about 24% more assets. These findings are robust for various dimensions of sustainable livelihood and show positive effects of SMFEs on livelihood assets. This study continues the discussion on several practical implications along with recommendations for future research.

Impact of Small-to-Medium Size Forest Enterprises on Rural Livelihood: Evidence from Khyber-Pakhtunkhwa, Pakistan