Several businesses fold due to Covid- 19

Finmark Trust researchers have indicated that 90 percent of businesses closed during the ongoing COVID- 19 pandemic. The researchers’ latest report dubbed, Botswana MSME ( Micro Small Medium Enterprises) COVID- 19 Impact Survey indicates that several businesses closed shop due to pandemic related issues.

“Access to finance and lower customer base became more prominent factors in business closure,” reads part of the report.

Finamark findings highlights that 88 percent of operational business has had a negative net impact on their business with only four percent stating it was positive and eight percent stating no impact.

“The count of those businesses claiming positive impact are less than eight hence no statistically sound inferences could be made as to what contributed to a positive impact,” said the researchers. Despite the tight spot that businesses endured during the pandemic, only four percent of operational businesses closed and opened a new business.

With access to finance and lower customer base topping reasons for business closure, other businesses closed shop due to political or economic environment, business compliance and legal issues and too many competitors. Finmark further highlighted that businesses employing between one and five employees had the highest proportion of closed businesses during lockdown. The crisis has widespread negative impact within each sector mainly tourism, household, manufacturing, business services, retail, construction and farming respectively. “The agriculture, construction and tourism sector has the lowest proportion of businesses that think they will recover in less than six months if the crisis ended immediately indicating the highest hit sectors.” Finmark research also indicates that despite the huge impact on business, 50 percent of operational MSMEs are optimistic that business performance will improve over the rest of the year ( 2021) while 30 percent think it will stay the same. In the manufacturing sector, the report highlights that remote working was highly impossible for most manufacturers who need to be on- site as supply- chain disruptions due to restricted movement of goods and low consumer demand from major clients like institutions affected the sector. On the retail sector, some of the challenges cited include increased product prices, supply chain disruptions, theft of stock; trading hours reduced resulting in limited trade. And the retailers have complained about informal traders who do not have licensing or rental fees or costs.

Meanwhile, Finmark has indicated that of the 831 MSME owners sampled, 591 MSMEs are currently operating.