The impact of the coronavirus pandemic has forced the small and medium-sized businesses (SMBs) to go for digital platforms in order to avoid closure and stay afloat, says a survey report.
The SMBs in Pakistan reported higher rates of closure by 28 percent compared with regional countries, rising from 23 percent in October and dropping from 38 percent in May last year, according to the survey conducted by Facebook on ‘Global State of Small Business’.
The Covid-19 pandemic has affected businesses around the world for over a year but the SMBs have been hit particularly hard due to their vulnerability to economic shocks. The closure rate of SMBs in India stood at 32%, 13% in Taiwan, and 16% in Taiwan.
The restrictions on business activities as a result of lockdowns and reduced consumer spending have imposed significant stress on these businesses.
Business sectors most reliant on close customer interactions have been most affected by the pandemic.
Hotels, cafes, and restaurants were most likely to be affected by closures amid declining sales, and falling workforce.
Globally, 25% of these businesses were closed, with 20% closed in the US, as per the survey. The majority of operational SMBs that reduced employment in Pakistan stood at 59%, Indonesia at 62%, Colombia at 62%, Mexico at 65%, and the Philippines at 68%, according to the survey report.
These SMBs laid off half or more of their employees, it added. Against the backdrop of lower sales and reduced cash flows, the SMBs were pessimistic about rehiring many of the employees laid off or furloughed during the pandemic.
About two-fifths of operational SMBs reported that they had rehired former employees in the past 3 months in South Africa 38%, Pakistan 39%, Indonesia 40%, Israel 41% and India 42%.—TLTP