Impact of COVID-19 on small and medium enterprises (SMEs)

Like other economic players, the novel pandemic severely hit small businesses—the larger source of growth and employment but also the most vulnerable sector—by disrupting national and international business networks, supply chain, and demand. To understand the evolving state of small enterprises during pre, par, and post-lockdown periods, BIGD in collaboration with Monash University, Australia conducted a survey on small enterprises, mostly light-engineering firms, and young workers across 18 districts in Bangladesh. The study finds that lockdown measures caused the majority of small enterprises shut down, and during the early period of relaxing the lockdown, one-third of the enterprises were operating at limited capacity. Demand drop and the burden of fixed costs to run the businesses were the prominent reasons behind the drastic fall in profit. As a result, workers were losing jobs and the gender gap was widening, because female labour-intensive work (i.e. beauty parlour, tailoring) was affected harder.