Shielded metal arc welding is a manual fusion welding process that widely used technique for joining ferrous and nonferrous metals. The quality of this welding process determined by the welding parameters includes electrode diameter, welding current, welding speed, arc length, electrode angle, and welding positions. This type of welding machine is often used to weld low carbon steel 0.01-0.034%of carbon contain up to 0.30%.This research was aimed to assess which types of defects frequently occurred in small and medium enterprises understand how to control the defects, how to improve welding skill and what identify reason or causes of those defects. The objective of this thesis was determining the parameter affecting the Shielded metal Arc welding and to identify the effect of welding defects to assess shielded metal arc welding defects by Analyses the factor affecting or causing the SMAW defect on low alloy steel in small and medium enter pries in the case of ADDIS ABABA city. About 180 target sample at one enterprises total 900 sample were selected in 5 enterprise as random sample methods. Both qualitative and quantitative research approach was used and prepared 50 questionnaires distributed and collected. Data collection methods like observations, questionnaires, photographic, interviews were presented. The collected data also analyzed and presented through cause and effect or fish bone diagram, Pareto diagram and Control charts. Those were used to determine which causes of a problem occur most frequently in each enterprise. Different causes were introduced for those defects like lack of skill, using inappropriate welding, welding environment. Due to this reason the main defects were Surface Porosity, Excessive Spatter and Undercut were the main defect occurred in the SME‗s and maximum defects were happens around 34.8%, 17.7% and 14% respectively and almost greater than 65% of the problems of welding engaged in those defects. Keywords: - SMAW, low carbon steel, SME‗s, defects, fish bone diagram, Pareto Chart