ILO score program survey Revelation suggested the micro, small, and medium-sized enterprises have always played a significant role in businesses. It is representing around 70% of Global employment as well as 50% of the GDP. That said, it isn’t easy to ignore it.
But unfortunately, these are the businesses that have faced major hindrances in their business goals. During the covid-19 situation, different businesses raise awareness and contribute to sustainable development and the global economy.
The effects of the covid-19 on the business continuity
Around 2.% of the total thousand companies from the eight countries had to shut down their operations due to this pandemic. Around 50% had also temporarily closed the business due to the direct instructions from the authorities.
On the other hand, the other 50% had to close them temporally due to a reduction in the orders. The high rise in the staff covid-19 infection had also brought permanent fees on the operation of these companies.
Here’s a highlight about the effects lower.
Depending on 75% of the SMEs are also experiencing The Loss in revenues from 2020. Some of the major businesses have been hampered in the areas like Bolivia, Ghana, and Columbia.
Reduced demand for the order
The situation is similar for certain customer orders, with around 75% of the companies suffering from the reduced demand and around one-third that is approximately 33 % of the companies suffering from a drop in the customer orders. Some of the small countries have also faced hectic situations.
Shortages in the cash flow
The situation has become so hectic that some of them are also facing problems with the cash flow. Around 9 out of 10 businesses have already faced a shortage in cash flow. The situation didn’t improve a lot in 2020. Besides the effects mentioned above on business continuity, there have also been effects on the labour force.
Some companies have also adopted the Udyog Aadhar Certificate today and are availing of the beneficial schemes for MSME.
Here is the highlight on the effects on the labour force
Impacts on the MSMEs have been dramatic. Around seven of the ten firms had reduced the production capacity due to the low number of temporary workers. They had to also seize the operations to reduce the working hours of the employees who were taking the leave.
Nearly one-third, approximately 30%, of the companies had to report the shortage of workers due to the containment measures, fear of infection, or family care responsibilities.
Highlight on the response to the pandemic
Plenty of recent measures have been taken to ease the business’s operations. Besides, the overall network is working based on the beneficiaries and also building more transparency. They are taking adequate steps to fix the critical situation.
Certain media reports representatives of the MSMEs have appealed to the government for taking appropriate actions to help them survive the pandemic. It comes inclusive of the GST, rate of tax concessions, and easy access to the credit.
In response to the impact of the coronavirus pandemic, some of the best finance experts have also put forward their recommendations. The mitigation for the risk is now possible by different methods. They are as follows:
Care for the people
The communication between the employees and the employer has been made quite frequent and robust. This ensures the understanding of the impact of the coronavirus pandemic on personal lives while also providing support and reassurance.
Building the system that takes some risk assessment and proper decision into consideration
Making the system in stages like the immediate, medium-term, and long-term decision-making process gives the needed results. Besides, it is also important for the risk assessment that is responding to the situation precisely. When you risk assessment, the focus is on the hygiene and the precautions that are much needed for the protection of humans.
Collateral free MSME loans are also available under the COVID relief package. The Finance Minister has made announcements regarding the economic relief package to MSME units.
Evaluation of the supply chains
During the outbreak, it’s essential to determine whether the customers are still the customers and what they will need from you. During the time, always talk to the vendors or the suppliers and continue figuring out what they can do and offer to you. I
n the process, always pay attention to the tight cash situation and do not pay everything with cash. Even now, CGTMSE has been instrumental in offering the guarantee cover to collateral facilities extended
Assessment of the operational risk
The assessment of the operational aspects of the business is a must. The creation of the free start checklist is a must. Ensure that you are much prepared for the challenges coming your way. The right policies are becoming very crucial for MSMEs.
Despite the significant struggles, the government is always responding to the covid-19 pandemic to nurture a positive, sustainable, and resilient future for small businesses.