The coronavirus pandemic has brought the world to a standstill. The worst affected segment in this crisis unarguably the micro small and medium enterprises (MSMEs).With businesses shut off and fixed cost dangling over them, SMEs and MSMEs are unable to handle the situation. While for the MSME sector, the shocks and surprises are not new, particularly after demonetisation and implementation of GST policy, but COVID-19 has nonetheless brought a unique predicament in the lives of entrepreneurs of the small and medium businesses.
When we think of COVID -19, there are more questions and unknowns than there are known’s and answers. Many MSMEs might close down as these enterprises are very fragile. They don’t have the resilience of a larger company and are therefore greatest at risk. So if this thing drags on for a long time, and we don’t do enough to throw a lifeline on them, keep them alive and then help them adapt, more than half of them might die and not recover. This could be a catastrophe for us.
Having spoken to entrepreneurs across different sectors from North East India, a comprehensive understanding of the kind of issues they are facing has emerged.
The number issue for all of them is cash. Their revenues have gone zero, their vendors have stopped paying them and receivables are completely frozen. Even when the lockdown is removed, the recovery is not going to be overnight. The need of the hour is to have a SME stabilisation fund. Entrepreneurs also need to figure out what the world needs and not what they used to produce. The MSMEs have to come together around industry associations. One of the reasons why the IT industry has been so successful is because they have organised NASSCOM. The crisis is also a giant opportunity. Entrepreneurs can strategise and find new ways of doing business. Those who can survive in the medium term and adapt are going to flourish.