Devex | Wed, Nov 18, 2020
by Nancy Lee, San Bilal, Manuel Bueno and Valeria Ramundo Orlando
The global scale of the COVID-19 crisis threatens micro-, small-, and medium-sized enterprises, which dominate employment around the world — especially in lowest-income countries.
In comparison with large organizations, MSMEs are seeing larger drops in sales, reduced retained earnings, less access to external finance, and fewer ways to adapt and adjust, while also employing a larger share of the most vulnerable populations. Women MSME owners are particularly hard hit by the pandemic, especially as their businesses are often in retail service industries that involve direct contact with customers.
With tight constraints on fiscal space and urgent social spending needs, the governments of most low-income countries are not able to extend support to MSMEs, while governments in more advanced economies, also hit by the recession, may likely opt to cut their development assistance.