Highlight results of a survey on the financial impact of COVID-19 on Micro and Small Enterprises (MSEs) conducted by FSD Zambia in collaboration with BFA Global show that Zambian businesses critically need working capital, with 72 percent of businesses unable to raise funds.
According to a statement issued by FSD Zambia head of communications, Eneyah Phiri, the lowest income segments are particularly vulnerable to the economic impact of COVID-19 and the resulting economic slowdown.
“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,” he said.
Mr Phiri said 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,” he said.
FSD Zambia Chief Executive Officer, Betty Wilkinson, said, FSD Zambia will be looking for options to help financial institutions grow working capital loans and expand on the Working Capital Access project to help these 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 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.
“In this critical moment, we need key insights for policymakers and other market players so they can design interventions that will help MSEs navigate through the current economic meltdown as the results of the global health pandemic,” he said.
The first wave of the survey polled one hundred and seventy (170) self-employed, traders and other micro and small entrepreneurs.
About 33% of the respondents were women and 67%, men with most in urban areas (71%) and the rest from peri-urban (28%) and rural (8%) areas.
Zambian Financial Sector Deepening Limited (FSD Zambia) is a Zambian organisation working closely with key players throughout the economy to ensure that all Zambians are financially healthy.