SMEs During COVID-19: Business Activities, Employability, and Stimulus Package

Since the World Health Organization (WHO) officially declared the outbreak of COVID-19 as a global pandemic, governments across the world implemented strict lockdowns to contain its spread. Although vital in containing the virus, it caused massive ramifications to world economies, and small and medium enterprises (SMEs) have been one of the hardest-hit sectors. This study assesses the economic impact of the pandemic on SMEs in Bangladesh. It also assesses the pandemic’s economic impact on a sample of youth, many of whom were employed in SMEs during the pre-pandemic period. Two rounds of surveys were conducted—the first round in July 2020, six weeks after the lockdown ended in Bangladesh, and the second round in January 2021, six months after the first round. Short, phone-based surveys were conducted with the SMEs and the youth. Overall, the findings suggest that even though 97% of the firms are operating fully by early 2021, their sales and profits have not yet recovered. Particularly, the state of clothing and tailoring sectors remains a concern as their earnings are the lowest among all, despite longer working hours. This youth survey reveals that the unemployment rate had gone down substantially in the first round, compared to the level during the lockdown, but it did not go down any further in the second round and remained 13 percentage points higher than the pre-pandemic unemployment rate. The post-pandemic employment situation of the female youth is much worse than that of the male youth.

Authors: Islam, Asadul; Rahman, Atiya; Nisat, Rafia; Khondoker, Zarine Anan
Type: Report