A computational study is presented on the flow of deformable red blood cells in stenosed microvessels. It is observed that the Fahraeus-Lindqvist effect is significantly enhanced due to the presence of a stenosis. The apparent viscosity of blood is observed to increase by several folds when compared to non-stenosed vessels. An asymmetric distribution of the red blood cells, caused by geometric focusing in stenosed vessels, is observed to play a major role in the enhancement. The asymmetry in cell distribution also results in an asymmetry in average velocity and wall shear stress along the length of the stenosis. The discrete motion of the cells causes large time-dependent fluctuations in flow properties. The root-mean-square of flow rate fluctuations could be an order of magnitude higher than that in non-stenosed vessels. Several folds increase in Eulerian velocity fluctuation is also observed in the vicinity of the stenosis. Surprisingly, a transient flow reversal is observed upstream a stenosis but not downstream. The asymmetry and fluctuations in flow quantities and the flow reversal would not occur in absence of the cells. It is concluded that the flow physics and its physiological consequences are significantly different in micro- versus macrovascular stenosis.