Impact of the pandemic on small and medium-sized enterprises

On December 7, in the General Auditorium of the University of Azuay, the launch of the report "Economic impact of the COVID -19 crisis on MSMEs (micro, small and medium-sized enterprises) in Ecuador", presented by Jaime Cadena and Andrés Argüello.

According to Cadena, the document was made because there is no current information on what is happening in small and medium-sized companies in the country, despite the fact that the health crisis caused by COVID-19 had a strong impact on the business sector.

Among other effects, there were problems in competitiveness, difficulties in accessing finance, and lack of resources and employment.

This "was more visible in small and medium-sized companies because they are the weakest," said Francisco Samohano, who was part of the report's writing team.

The objective of this research was to estimate the impact of the COVID-19 pandemic on variables such as employment, sales and on different economic and financial indicators, in order to identify the main difficulties that companies are going through.

Also, determine the impact of the economic crisis generated by COVID-19 on the organization of the company and study the innovative activity of the microenterprise and its access to financing.

For this, through a questionnaire, information was collected from 1.111 Ecuadorian micro, small and medium-sized companies that were classified according to their size, seniority and activity sector. Here we found relevant data such as that 64% of these organizations are managed in a family environment, and 1% of the directors have university studies.

Regarding the negative impacts, on the one hand, there is that of the economic and financial indicators, such as the level of turnover, profitability, productivity, investment, level of debt and level of liquidity, which were affected with more than 70 %. Being the level of liquidity, with 77,3%, the area hardest hit.

On the other hand, the impact on the organization of the company was presented, where in "Activities with customers and suppliers", on a scale from 1 to 5 (1 = less negative impact and 5 = more negative impact) the option "the Our clients' payment terms have become longer "was the worst hit, with 3,50.

And in "Operating activities", the item most affected, with 3,50, was "the offer of products / services has been modified to address new customers".

Despite this, Argüello explains that COVID-19 has allowed Ecuadorian companies to develop new ideas, encouraging them not only to undertake, but to innovate to improve their sales.

However, a percentage of 21,8% of these companies state that they have not requested financing for their projects because they believe that they will not get it, for which Argüello concluded:

"For the ideas of entrepreneurs to be realized, greater support from the State is necessary."

The event took place within the framework of the 51 years of the Faculty of Administration Sciences.

UDA correspondent