Concerted Multisectoral Strategic Interventions towards Sustaining SMEs During and Post Covid –19 Disruptions
DOI:
https://doi.org/10.53819/81018102t5140Abstract
The crisis occasioned by the Covid-19 pandemic and the resulting containment measures caused major negative effects on the global economy. For instance, it cut by 3 to 8 percentage points the GDP growth of African economies. This crisis triggered a myriad of interventions from various players to mitigate or avoid the collapse of SMEs. This paper sought to analyse and document some of the strategic interventions adopted and those available for consideration in the quest to sustain SMEs during and post Covid-19 crisis. The paper was anchored on the premise that SMEs can only survive and be sustained by the different players in the business ecosystem taking deliberate measures towards mitigating the absurdities of the crisis. The paper considered more than 100 journal articles and reports by various governments and international agencies. After analysing the various strategies, the paper concluded that each key player, including governments, financial institutions, SMEs and the wider business community, has initiated and implemented strategies to ensure the sustenance of SMEs during and post Covid-19 crisis. Some of the identified strategies by some of the governments include; mobilisation of financial resources, direct funding and support programs, Fiscal stimulus programs, monetary incentives for SMEs, exemption or reductions and some instances deferred tax obligations. Financial institutions on the other hand have introduced rescheduling of repayment plans of existing loans to ensure that SMEs have sustainable liquidity and not overstretched to meet their debt obligations in the short-term. The wider business community have made efforts to strengthen existing symbiotic partnerships to protect and ensure survival of the business ecosystem. Finally, the SMEs are encouraged to embrace technology and innovation, review and realign their distribution channels, ensure new product developments aligned to containment measures, Seek partnerships and Development of new market access approaches. From the reviewed literature, the paper established that most of these strategies have proven to be of profound value. The paper recommends that the different players intensify the deployment of the discussed strategies to ensure that SMEs remain afloat during and post Covid. The paper further recommends that policy makers create an enabling policy framework to enhance the adoption and operationalisation of the discussed strategies to ensure the survival and sustenance of the SMEs during and post the Covid-19 disruptive times.
Keywords: Multisectoral, Strategic Interventions, Post Covid-19
References
Abdelnour A, Devignes JC, Randery T, Rogers J (2020). COVID-19 crisis: How distributors can emerge stronger than before. McKinsey & Company Insights, October, 8. https://www.mckinsey.com/~/media/McKinsey/Industries/Advanced Electronics/Our Insights/COVID 19 crisis How distributors can emerge stronger than before/COVID-19-crisis-How-distributors-can-emerge-stronger-than-before-vF.pdf
Albaz A, Mansour T, Ride T, Schubert J (2020). Setting up small and medium-size enterprises for restart and recovery. McKinsey & Company, 1–6.
AMCHAM (2020). Assessing the impacts of the COVID-19 pandemic on Kenya’s Economic and Business Environment. Report and Recommendations for enhancing business continuity.
Amoussou O, Karagueuzian C, Bah M (2021). African SMEs through COVID-19 Challenges, Policy Responses and Recommendation. Africa Economic Brief, 12(5), 1–8.
Asad A (2018). The Role of SMEs in Asia’s Economic Growth. SME Finance Forum. https://www.smefinanceforum.org/post/the-role-of-smes-in-asias-economic-growth
Asare R, Akuffobea M, Quaye W, Atta-Antwi K (2015). Characteristics of micro, small and medium enterprises in Ghana: Gender and implications for economic growth. African Journal of Science, Technology, Innovation and Development, 7(1). https://doi.org/10.1080/20421338.2014.979651
Barone A (2021). Synergy. Investopedia. https://www.investopedia.com/terms/s/synergy.asp
Baškarada S, Shrimpton D (2016). Learning through foresight. Foresight, 18(4), 414–433. https://doi.org/10.1108/FS-09-2015-0045
BizCommunity (2021). Diversification is key for SMEs to survive. News. https://www.bizcommunity.com/Article/196/838/205466.html
Caballero-Morales SO (2021). Innovation as recovery strategy for SMEs in emerging economies during the COVID-19 pandemic. Research in International Business and Finance, 57(January). https://doi.org/10.1016/j.ribaf.2021.101396
Dimson J, Mladenov Z, Sharma R, Tadjeddine K (2020). COVID-19 and European small and medium-size Enterprises: How they are weathering the storm. McKinsey & Company, October. https://www.mckinsey.com/industries/public-and-social-sector/our-insights/covid-19-and-european-small-and-medium-size-enterprises-how-they-are-weathering-the-storm#
Doz Y, Kosonen M (2008). The dynamics of strategic agility: Nokia’s rollercoaster experience. In California Management Review (Vol. 50, Issue 3, pp. 95–118). https://doi.org/10.2307/41166447
FSB (2020). One in three closed small firms fear they’ll never reopen amid widespread redundancy plans. 2020 National Federation of Self Employed & Small Businesses Limited.
Gerald E, Obianuju A, Chukwunonso N (2020). Strategic agility and performance of small and medium enterprises in the phase of Covid-19 pandemic. International Journal of Financial, Accounting, and Management, 2(1). https://doi.org/10.35912/ijfam.v2i1.163
Gibbens E (2020). Helping small businesses navigate through COVID-19 recovery. IFC Insights, 1–3. https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate
Harrison R (2020, April 29). 5 things African SMEs need right now. Africa Management Institute. https://www.africanmanagers.org/all/blog/87-of-african-smes-are-worried-about-surviving-here-are-the-five-things-they-say-they-need/
Hidayati R, Rachman NM (2021). Indonesian Government Policy and SMEs Business Strategy during the Covid-19 Pandemic. Niagawan, 10(1), 1. https://doi.org/10.24114/niaga.v10i1.21813
Hoorens S, Hocking L, Fays C (2020). How small businesses are coping with the impact of COVID-19: Results from a survey in Turkey and the Middle East. How Small Businesses Are Coping with the Impact of COVID-19: Results from a Survey in Turkey and the Middle East. https://doi.org/10.7249/rra607-1
IMF (2020). Policy Responses to COVID19. In Imf (pp. 1–189). https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#I
International Finance Corporation (2020). Uncertainty, Fear, and Coronavirus: The New Reality for Africa’s Entrepreneurs. Impact at IFC. https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external
International Finance Corporation (2021). How Firms are Responding and Adapting During COVID-19 and Recovery: Opportunities for accelerated Inclusion in emerging markets. In International Finance Corporation, World Bank Group.
International Trade Centre (2019). Promoting SME competitiveness in Kenya: Targeted solutions for inclusive growth. In ITC, Geneva.
International Trade Centre (2020). COVID-19: The Great Lockdown and its Impact on Small Business. In SME Competitiveness Outlook 2020. International Trade Centre. https://doi.org/10.1016/j.ajem.2020.04.048
Jackson M (2020). Why collaborating with other businesses may be a smart financial move post-COVID-19. https://www.bbvausa.com/business/bright-ideas-for-business/growth/why-collaborating-with-other-businesses-may-be-a-smart-financial-move-post-covid-19.html
Jiang M, Hu Y, Li X (2020). Financial Support for Small and Medium-Sized Enterprises in China Amid COVID ‑ 19. Finance; Theory and Practice, 6(045), 6–14. https://doi.org/10.26794/2587-5671-2020-24-5-6-14
Juergensen J, Guimón J, Narula R (2020). European SMEs amidst the COVID-19 crisis: assessing impact and policy responses. Journal of Industrial and Business Economics, 47(3), 499–510. https://doi.org/10.1007/s40812-020-00169-4
Kalidas S, Magwentshu N, Rajagopaul A (2020). How South African SMEs can survive and thrive post covid-19. McKinsey Insights, July, N.PAG-N.PAG. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=144541557&site=ehost-live
Kawira DK, Mukulu E, Odhiambo R (2019). Effect of Digital Marketing on the Performance of MSMES in Kenya. Journal of Marketing and Communication, 2(1), 23.
Magsamen B, Shutko G (2020). For a true economic recovery, small businesses will need more support. In The Digital transformation of business. World Economic Forum.
Magzter (2020). Impact of Covid-19 : SME Sector Must Develeop Strategies to Fight Back. SME World.
Marmore MENA Intellligence (2021). Importance of SMEs in GCC: Challenges amid COVID and way forward. Marmore Article.
Mehta S, Saxena T, Purohit N (2020). The New Consumer Behaviour Paradigm amid COVID-19: Permanent or Transient? Journal of Health Management, 22(2), 291–301. https://doi.org/10.1177/0972063420940834
Nyamboga T, Ali H (2020). Influence of Covid-19 on Performance of Small and Micro Enterprises in Kenya: a Case of Kenya Women Finance Trust in Garissa Township Sub County, Kenya. International Journal of Economics, Business and Management Research, 4(11), 168–185. www.ijebmr.com
OECD (2017). Enhancing the Contributions of SMEs in a Global and Digitalised Economy. Meeting of the OECD Council at Ministerial Level. https://www.oecd.org/mcm/documents/C-MIN-2017-8-EN.pdf
OECD (2019). OECD SME and Entrepreneurship Outlook 2019.
OECD (2020a). Covid-19: SME Policy Responses. Oecd 2020, March, 1–55. https://oecd.dam-broadcast.com/pm_7379_119_119680-di6h3qgi4x.pdf
OECD (2020b). COVID-19 Government Financing Support Programmes for Businesses. In Finance.
OECD (2020c). Financing SMEs and Entrepreneurs 2020 : An OECD Scoreboard. In Financing SMEs and Entrepreneurs 2020 : An OECD Scoreboard (pp. 2–12).
OECD (2020d). Job retention schemes during the COVID-19 lockdown and beyond. OECD Policy Responses to Coronavirus (COVID-19), October, 1–23. https://www.oecd.org/coronavirus/policy-responses/job-retention-schemes-during-the-covid-19-lockdown-and-beyond-0853ba1d/#biblio-d1e2098
OECD (2021a). One year of SME and entrepreneurship policy responses to COVID-19 : Lessons learned to “ build back better .” April, 1–36. https://www.oecd.org/coronavirus/policy-responses/one-year-of-sme-and-entrepreneurship-policy-responses-to-covid-19-lessons-learned-to-build-back-better-9a230220/
OECD (2021b). The Digital Transformation of SMEs. OECD Publishing, 1–4. https://www.oecd-ilibrary.org/industry-and-services/the-digital-transformation-of-smes_bdb9256a-en
Saez M, Tobias A, Varga, D, Barceló MA (2020). Effectiveness of the measures to flatten the epidemic curve of COVID-19. The case of Spain. Science of the Total Environment, 727. https://doi.org/10.1016/j.scitotenv.2020.138761
Statista Research Department (2021, August 3). Coronavirus: impact on small business in the U.S. - statistics & facts. https://www.statista.com/topics/7702/coronavirus-impact-on-small-business-in-the-us/
U.S. Census Bureau (2020, May). Small Business Pulse Survey: Tracking Changes During The Coronavirus Pandemic. Washington, DC: U.S. Census Bureau. https://portal.census.gov/pulse/data/
Varghese NV, Püttmann V (2011). Trends in diversifi cation of post-secondary education. International Institute for Educational Planning (IIEP), 7–34.
Vial G (2019). Understanding digital transformation: A review and a research agenda. In Journal of Strategic Information Systems (Vol. 28, Issue 2, pp. 118–144). North-Holland. https://doi.org/10.1016/j.jsis.2019.01.003
World Bank (2015). Principles for Public Credit Guarantee Schemes (CGSs) for SMEs.
World Bank (2018). Improving SMEs’ access to finance and finding innovative solutions to unlock sources of capital. World Bank. https://doi.org/10.3362/9781780445861
World Bank (2020, April 29). COVID-19 Dampens Kenya’s Economic Outlook as Government Scales up Safety Net Measures. Press Release. https://www.worldbank.org/en/news/press-release/2020/04/29/covid-19-dampens-kenyas-economic-outlook-as-government-scales-up-safety-net-measures
WTO (2016). Levelling the trading field for SMEs. In World Trade Report 2016. https://doi.org/10.20529/ijme.2010.002
WTO (2020). WTO | 2020 Press Releases - Trade set to plunge as COVID-19 pandemic upends global economy - Press/855. World Trade Organization, 2020(April), 1–13. https://www.wto.org/english/news_e/pres20_e/pr855_e.htm
Zeidy IA (2020). Economic impact of covid-19 on micro, small and medium enterprises (msmes) in africa and policy options for mitigation. Common Market for Eastern and Southern Africa, 11(12), 23–34.