by Dorcas Omotayo
Due to the ravaging pandemic, Small and Medium Enterprises (SMEs) are currently in a dip as business activities were grounded to a halt during the lockdown which lasted for over a month. The plunge in exchange of goods and services required that some employees be laid off and others sent on furlough. According to an article published by McKinsey – SMEs account for two-thirds of global employment and half of global GDP. A failure to protect them could put the entire global economy at risk.
The article expatiates on why protecting SMEs is crucial in building a sustainable economy post pandemic. Fact remains that a high number of large companies are dependent on SMEs for business continuity and also some small cities and towns relay solely on them not to mention the employment opportunities created by SMEs.
In an attempt to cushion the effect of the pandemic on businesses, Federal Government through the Central Bank of Nigeria (CBN), introduced a Targeted Credit facility of N50 billion to support Micro Small Medium Enterprises (MSMEs), manufacturers and the health sector. Similar to this, is the N1 billion MSMEs intervention scheme by the Oyo state government as a way of stimulating the dwindling economy. Other states are not left out, as they have all started rolling out intervention packages for SMEs.
Recall that as part of the palliative measures for businesses, a three-month repayment moratorium for all government funded loans was declared by the president. In the same vein, the Lagos State Employment Trust Fund (LSETF) announced the suspension of loan repayment obtained by 11,000 MSMEs and technology start-ups in the state.
Meanwhile, SMEs could be more susceptible during a crisis, owing to the fact that they may be experiencing liquidity challenge, inflexible supply chain and disproportional representation. However, in an attempt to providing relief for SMEs, the Government must look beyond providing only funds to setting up an integrated structure to ensure that all concerted efforts are aimed towards achieving the same goal and also with focus on future growth.
Finally, in order to accelerate the impact of the various stimulus packages and palliatives offered by the government, SMEs should be granted easy access to bailout funds, an enabling environment for sustainable business growth, inclusivity of SMEs in government projects as well as public procurement participation and continuous planning and strategizing for the next normal.