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SMEDA’s Survey on Impact of Covid-19 (Coronavirus) on SMEs

Pakistan is facing the brunt of Coronavirus outbreak as the country is in a partial lock down. This has had a negative impact on businesses. Initial estimates show that the economy will witness sluggish growth in services, manufacturing and agriculture sectors, increase in unemployment, decrease in government revenue, decline in exports and disruption in supply chains. Lockdown across the country is expected to make the situation dire for the estimated 5.2 million enterprises in the country.

Thus, in order to assess the current situation, “Impact of Covid-19 on SMEs”; an online survey was launched by SMEDA on April 3, 2020 until April 14, 2020. Nine hundred & twenty (920) businesses participated in the survey from all across Pakistan. These 920 businesses have an estimated total annual sales turnover of PKR 29 Billion and employ an estimated 19,641 employees. Moreover, these businesses also employ an estimated 8,950 daily wagers. Most of the business are small in size. 33% of respondents have an annual sales turnover of up to PKR 1 million and 34% employ 1 to 5 employees.

Survey Report highlights the issues being faced by SMEs during lockdown and its impact on employment and production. 95% of respondents/ businesses have reported that COVID-19 and the subsequent lock down has caused a reduction in their operations. Similarly, 92% of respondents have reported a disruption in their supply chain and 23% have reported up to 100% loss in their export orders.

Increasing unemployment has been a major issue during the lock down and 46% of surveyed business have laid off some of their employees. However, 26% report that they will rehire their employees in one month, after the end of lock down.  Nonetheless, 89% of SMEs are facing financial issues while 60% have reported issues in selling their product/service and have thus identified areas for public sector support to sustain their businesses and mitigate the impact of COVID-19. These areas include; SME-specific support measures including financial packages, tax relief, guarantees and grants, relaxation in payments of utility bills, support in paying salaries and easing conditions for loan repayments. Details of required support and Survey results are available in full report, which can be downloaded from the link below.