Updated: Mar 31
It's been a year and it seems COVID19 is not going away anytime soon. Pre-covid days, about 70% of Southeast Asian SMEs in particular were optimistic about growth and forecasted revenues to remain flat. But then as we all say, "COVID19" so there was a shift in focus. Companies started operating on a limited production and service delivery during the pandemic has been less, leaving no choice but to lay off employees. And for MSMEs, it's been a challenge to survive. MSMEs are at a greater risk due to abrupt supply chain disruptions and tightened financial conditions.
While most governments make an effort to support and reduce the glaring disparities between MSMEs and large businesses, without proper documents, MSMEs cannot get any formal support for any grant. With a lot of MSMEs operating informally, they have been hit hard. And banks will be apprehensive to provide loans or to access finance, more so raise a working capital, which hinders their business operations.
With a shift on digital, MSMEs are yet to adopt the technology due to the lack of resources and limited skills. And this makes the gap prevalent between large and the small enterprises, as well as social inequality. In order to help companies survive during the new normal going digital is the key. And the survival of MSMEs which account for at least 50-70% of jobs is crucial. With another lockdown, this will be another challenge to overcome. A lot of government and private businesses have initiated initiatives to go digital. And much like these business owners, banks and other financial institutions are easing requirements to be able to extend credit to MSMEs.
Commercial banks are partnering with fintech companies to support their SME customers to adopt to this new way of doing business. Local banks such as BIDV in Vietnam, Yoma Bank in Myanmar and Unionbank in the Philippines have all partnered with Kiu to enable MSMEs to survive. These partnerships will enable more MSMEs to go digital allowing banks to extend that much needed loan credit. But more than the loan, this enables your small business to survive not just during the pandemic but for longer. With a proper system in place, you can formally operate your business, prepare for growth, reduce risks and making your business more credible to financial institutions. So when the time comes, you will not only survive but thrive.
And just like the first lockdown, the question still remains, can your business survive another lockdown? Let us help you to survive and ease that process. Talk to us now email@example.com.