26% of SMEs suspends activities during January-May due to COVID-19: Report

A total of 26% of small- and medium-sized enterprises (SMEs) worldwide suspended their activities between January and May this year, due to the novel coronavirus (COVID-19).

In some countries, this percentage increased to as high as 50%, as government lockdowns and a global economic slowdown negatively impacted the companies around the world.

The statistics were published on Wednesday in a Facebook report entitled “The Global Status Report for the Small and Medium-Sized Business and Enterprise Sector”, conducted in partnership with the World Bank and the Organization for Economic Co-operation and Development (OECD).   

The report, based on a survey of over 30,000 SME owners in over 50 countries around the world, is the first in a continuous series that were planned prior to the pandemic.

With the pandemic slowly petering out, SMEs now need to resume liquidity flows to restore their business and keep up their ability to pay employee wages. The report stated that a large proportion of SMEs having reduced their workforce as part of their response to the pandemic’s consequences during the time of the survey.

A total of 51% of companies surveyed in Egypt reduced their employee numbers, alongside 50% in the UAE, and 35% in Saudi Arabia.

Other key statistics in the report showed that 73% of companies in Egypt reported that their sales this year were lower than last year, alongside 81% in the UAE, and 64% in Saudi Arabia.

The report’s data confirms that entrepreneurs are resilient in the face of challenges, and that many SMEs on Facebook are optimistic about the future of their business, despite the challenges posed by the Covid-19 pandemic.

It added that 52% of SMEs in Egypt are optimistic about their business in the post-pandemic cycle, alongside 61% in the UAE and 59% in Saudi Arabia.

As for global levels, about 74% of the SMEs that closed their businesses during the survey’s time period reported that they expect to reopen following the lifting of pandemic-containing measures.

In the countries from which the samples were taken, for example, the activity most frequently mentioned by business owners in closed companies was to work on re-opening plans.

The rapid and successive pace of changes resulting from the pandemic and unpredictability encouraged SMEs to adopt a proactive approach rather than a reactive approach, in order to restore their activities.

According to the study, the only way that will enable SMEs to survive the pandemic is  digital transformation. The report found that at least a third of SMEs indicated that they had achieved at least 25% of their sales through digital channels in the past 30 days.

A total of 35% of SMEs that operate on Facebook in Egypt said they accomplished 25% of their sales digitally during the past month, alongside 40% in the UAE and 29% in Saudi Arabia.

Ramiz Shehadeh, CEO of Facebook in the Middle East and North Africa (MENA), said that Facebook launched Facebook Shops to facilitate online sales. This is to encourage small companies to overcome the global health crisis.

This was in addition to the Business Resource Hub, which was established to provide business owners with training, as well as advice and information, including guidance from health care experts.

Over 160m companies around the world use Facebook, Instagram, Messenger, or WhatsApp every month to reach customers, execute sales, and achieve growth.

The post 26% of SMEs suspends activities during January-May due to COVID-19: Report appeared first on Daily News Egypt.