96% MSMEs in Bangladesh lost income in Covid-19 pandemic
'42% of MSMEs and smaller businesses are in direct threat of failure in the next six months and regardless of an economy's level of development'
An astounding 96% of micro, little and medium enterprises (MSMEs) in Bangladesh lost income during the Covid-19 pandemic, according to a recently available study.
MSMEs in the united states reported a median loss running a business of 82% through the “national holidays” and client footfall reduced by typically 67%, it added.
The findings of the study were disclosed within an online workshop, titled Assessment of the impact of Covid-19 on MSMEs in Asia and Africa, on Thursday. The workshop was reinforced by Swiss Capacity Construction Facility (SCBF) and MicroSave Consulting (MSC), said a press release.
The study was conducted by MSC with support from the Bill and Melinda Gates Base, MetLifeFoundation, Swiss Capacity Setting up Facility, and Mastercard Foundation.
At the workshop, MetLife Foundation Financial Health Strategy Lead Evelyn Stark remarked that one of the biggest coping mechanisms observed through the pandemic is an increase in savings into extra formal products such as cell wallets and credit unions.
Furthermore, there's been a reduction in the demand for credit rating from the masses, but an increase in the demand for credit rating from MSMEs as they look to restart their businesses.
Payal Dalal, senior vice president (social impact, international markets) in Mastercard Centre for Inclusive Development, said: “42% of MSMEs and small businesses are in direct threat of failure found in the next six months and regardless of an economy's level of expansion, size, geographical location, women have been disproportionately more susceptible to the economic consequences of this pandemic.”
Mike McCaffrey, East and Southern Africa regional manager of UNCDF, and Tag Napier, CEO of FSD Africa, were also among the panellists. The workshop was moderated by Graham AN Wright, group taking care of director of MSC.
The MSME sector in Africa and Asia will desire a three-pronged method of kick start the street to recovery. The support will need to result from governments, regulators, and personal service providers together with personal sector players, said the news release.
Reports from Kenya indicate MSMEs were showing signals of recovery once the markets reopened. Measures taken in Kenya that could show just how for Bangladesh include the reduced amount of SME Turnover Tax from 3% to 1%, a rise in the cap for all those liable to shell out the levy from $50,000 to $500,000 and exemptions for small-scale businesses with twelve-monthly sales significantly less than $5,000, based on the panellists.
“The Covid-19 pandemic is a huge test on financial inclusion and there can be an urgent need from donors, private sectors and governments to essentially give attention to supporting the low- and moderate-income populations and MSMEs on the journey back to recovery in order to avoid the risk of these falling back to the vicious cycle of poverty and indebtedness,” they added in the news release.