Small and Medium Enterprises in the Pandemic : Impact, Responses and the Role of Development Finance
This study highlights how COVID-19 has affected small and medium enterprises, drawing on newly released World Bank Enterprise Surveys in 13 countries. The study shows that firms of all sizes are severely affected in multiple dimensions; however, fi...
| Main Authors: | , , , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/729451600968236270/Small-and-Medium-Enterprises-in-the-Pandemic-Impact-Responses-and-the-Role-of-Development-Finance http://hdl.handle.net/10986/34552 |
| Summary: | This study highlights how COVID-19 has
affected small and medium enterprises, drawing on newly
released World Bank Enterprise Surveys in 13 countries. The
study shows that firms of all sizes are severely affected in
multiple dimensions; however, firm size matters for the
intensity of the different channels of transmission and
firms' responses. Small and medium enterprise sales
shrink by more and their cash drains faster than large firms
in the same sector and country. Among them, faster growing
firms experience the demand shock somewhat less severely,
but they are more exposed to international trade disruption,
supply, and finance shocks. Yet, a range of firm responses
to the downturn seem to be out of reach. Fewer small and
medium-size enterprises, for example, start remote work,
leaving their workers exposed to health risks. To make it
through the pandemic, the majority of smaller firms do not
turn to banks for loans; they need grants. Although
development finance is not enough to fill the financing gap,
development finance institutions are relevant -- in
investment mobilization, demonstration, and know-how -- as
economies move toward recovery and rebuilding. Delivering
these requires rapid efforts to build partnerships and
gather information in places where development finance has
been limited in the past. |
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