A survey on the financial impact of COVID-19 on SMEs conducted by the Zambia Financial Sector Deepening and BFA Global show that Zambian businesses critically need working capital, with 72 percent of businesses unable to raise funds.
The research, which was aimed at understanding the economic situation from the perspective of MSEs, shows that about 40 percent of them are seeing a significant decrease in revenues.
The survey was also designed to assess Medium and Small Enterprises digital readiness as a method to limit the impact of COVID-19.
FSD Zambia Chief Executive Officer Betty Wilkinson says the key issue of gaps in working capital is important and her Organisation will be looking for options to help financial institutions grow working capital loans to help the enterprises survive and thrive.
“The key issue of gaps in working capital is important. So is the optimism and commitment of small firms to stay alive through the challenging COVID-19 period. FSD Zambia will be looking for options to help financial institutions grow working capital loans and expand our own Working Capital Access project to help these enterprises survive and thrive,” she said.
And FSD Zambia Director Analytics, Floyd Mwansa said assessing the impact of COVID -19 on MSEs is vital, as their survival is important to sustain the livelihood of most households.
This is according to a statement released by FSD Zambia Head of Communications Eneyah Phiri.
Mr. Phiri states that the research, which was aimed at understanding the economic situation from the perspective of MSEs, shows that about 40 per cent of MSEs are seeing a significant decrease in revenues.
“The survey was also designed to assess MSE digital readiness as a method to limit the impact of COVID-19. Despite these odds, most MSEs foresee continuing operations. They are confident that their business revenue is enough for the same level of production and are optimistic about recovery” Mr. Phiri said.
As recent studies have shown, the lowest income segments are particularly vulnerable to the economic impact of the coronavirus pandemic and the resulting economic slowdown. The survey by FSD Zambia and BFA Global was conducted to better understand the effects of the crisis on MSEs in the country.
The results of the survey will help FSD Zambia, Government and other financial market players to fill the gap in digital technology, to facilitate commerce not only in the time of COVID-19 but in the near future.
As MSEs are encouraged to adopt the use of digital platforms, partnerships among key stakeholders of the sector should aim to improve internet connectivity issues, technological infrastructure and lower prices of digital financial services.