This Paper al/empts Jo analyze the lef{ol and practical challenges including opportunities i11 granting urban land to .MSEs 01 Ra/tit· Dar City. Urban land is the 111os1 important resource, inter alia. ro undertake business. However. its inaccessibility becomes a challenge to :HSEs operating their business at Balm· Dar City ABSTRACT The researcher questioned why this is so and attempted 10 investigate the challenges that hamper granting 11rb(l11 fund to AlSEs at Bahir Dar City. To identify Ifie chaltcngcs, the researcher consulted m1111y titeraturcs. Besides he collected pertinent information through tnterviews and field observation, and the collected data arc arranged and analyzed in line with the issues under consideration. The study findings uncovered that the challenges i11 granting land lo MS!:'~ al Ba/11r Dar ('it) mainly related with the legal, i11.Hit111io11al and practical constraints. The urban land lease legislanons, e1U1C'Led 011e after the other. create auction as the main mode of urban land grant. Such system causes increase of 11rho11 loud price, which becomes unaffordable lo /vfSl:'s whose 111co111<' i'I insufficient to acquire land through auction. Fur/her, these legi.,/atio11s also encompass various restrictive provisions tho! limit transferability and tenure security of urban laud. 011 rite other hund, lack of coordination, commitment om/ finance in the instiunions responsible i11 the course of granting 11rha11 land 10 ,\1Sfa <1! Bahir Dar City become a challenge. Moreover. third purl) interventiou shortage of suituble land and th« Like become challenges facing the practical intplemenuuion <!l 11rh1111 land want lo ,\4SI~·., ut Balur Dar City. Because of these challenges the issue of land provision has constrained the chance of 1\{W;,,. who desires to star/ up and expond their busiues« activity in the city. Conversely, there are also opportunities i11 granting land to MSEs in the City. Among these the recognition of MSEs to be beneficiat ies of urban land ft hough for o short period) i11 the A NS Revised lease Regulation and lease Directive through allotment, the attempt of the government lo construct shades and clusters to olleviate the problem of land of !t,,fSF.s at the City. the estuhlishtnent of the AJ\S TVEDB m well as the Bahir Dar City TVEnl) ant! TVEDO lo administer the M.W;,,. can be taken as prospects 10 avoid the problem oflaud/working space which stifled the augmentation of MSJ..'s in the cttv. Therefore, to abolish the challenges and to enhance the opportunities in gra111111x tand to 1\ISEs at Bahir Dar City. evaluating and revising the applicable urban land lease holding legislations and the concerned institution as well us securing better enforcement of laws and policies is crucial.