Abstract: The ongoing COVID-19 pandemic poses an extraordinary challenge to the Micro, Small and Medium Enterprise (MSME) sector since this sector mostly comprises ‘offline’ enterprises relying on personal interaction and have much lower reserves of liquidity and less access to credit. The nationwide lockdown since 24th March 2020 is, therefore, certainly bound to break the back of the MSME sector. Given the widespread presence of MSMEs in the industrial and service sectors, the lockdown will have major interruption in the form of job losses, factory closures, manpower shortages in the urban areas due to the mass exodus witnessed during the early days of lockdown, increased bankruptcy and export order cancellations. The magnitude of the impact of COVID-19 has made many international organizations calling out for massive governmental support. A study carried out by ILO estimates the worst case scenario to be 24.7 million workers losing jobs, and the report mentions that “sustaining business operations will be particularly difficult for Small and Medium Enterprises (SMEs)”. A survey carried out by MSME industry associations in Tamil Nadu reports 44.7% revenue shortfall during the lockdown period. Given the smaller scale of operations and low level of digitalization, such entities may not be in an immediate position to adopt new technology and tele-working. Therefore, it becomes imperative on the part of government and financial sector to develop and implement multiple support systems for the enterprises in this sector.
Keywords: Liquidity, manpower, bankruptcy, digitalization, tele-working, support systems.
Title: Challenges and Opportunities for Micro, Small and Medium Enterprises
Author: Dr. Moumita Banerjee
International Journal of Interdisciplinary Research and Innovations
ISSN 2348-1218 (print), ISSN 2348-1226 (online)
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