MSMEs are struggling to overcome the onslaught of the pandemic

Amid the backlog caused by the covid-19 pandemic, mmicro, small and medium enterprises seek opportunities for growth and development in order to continue contributing to the economic and social growth of the country, says the National Union of Small and Medium Enterprises (Umpyme)as part of the celebration of St International Day of Microenterprises and Small and Medium Enterprises.

Micro, small and medium enterprises in Panama represented more than 34% Gross domestic product (GDP), broadly speaking, a similar contribution of the Panama Canal to the national economy, figures disrupted by the covid-19 pandemic, he points out President of Umpyme, Franklin Martínez.

After 18 months of closure of economic activities in the period 2020-2021, Panama lost more than 40% of the micro, small and medium enterprises of the business park of approximately 96 thousand.

Currently, official figures show 10% less than what it was before 2020, however, President of the National Union of Small and Medium Enterprises (Umpyme), Franklin Martínez He believes that there is a significant number of companies that are not working, but have not closed down, nor are they paying cash.

Likewise, MSMEs represented 80% of employment at the national level before the pandemic, today it is 60%, according to Umpyme data.

The International Labor Organization (ILO) defines micro, small and medium enterprises as the backbone of economies and the world of work. In the midst of celebrating the International Day of Micro, Small and Medium Enterprises, ILO Director General Gilbert F. Houngbo, reaffirmed the ILO’s commitment to supporting the sector and ensuring its resilience in the face of crises, climate change and economic uncertainties.

Houngbo highlighted the contribution of MSMEs to the economy, which generate two-thirds of the world’s workforce, playing a key role in the fight against poverty and inequality through the creation of decent and productive jobs.

The representative of micro, small and medium enterprises in Panama recognizes training as a fundamental entity to support the development of this sector. “It’s a formula that starts with education, accompaniment and acceleration in the third place, and then moves to funding,” said the president of Umpyme.

He also pointed out the lack of microcredit banking entities and specific programs for the sector, which means that microentrepreneurs must meet the same conditions as large companies in order to be able to access a bank loan.

It is difficult for micro, small and medium-sized companies to meet the requirements that banks regulate by the Bank Administration, and even more so due to the health, social and economic situation that the country is going through since 2020, which forced the closure of production activities, representatives of this sector stated.

Martínez pointed out that 72% of the decisions made in micro, small and medium enterprises are made by women, many of whom are mothers. In Panama, microenterprises are eminently serviceable in the capital and in the interior of the country, he added.

Microenterprises are the most successful and representative sector of the Panamanian economy, the sector that receives the most benefits with the lowest income and the sector with the greatest possibility of converting contributions into jobs and economic benefits. for the nation, concludes Martínez.

Data
Microenterprises and small enterprises, defined as enterprises with fewer than 50 workers, including the self-employed, make up the vast majority of employees in many countries, notes the ILO.

The share exceeds 90% of all workers in most countries of East, Central and West Africa and South Asia, and more than 80% in most countries of South-East Asia, Central and West Asia and the Arab states. In Latin America and the Caribbean, micro and small enterprises represent from 52% of employment in Chile to more than 90% in Bolivia and Honduras.

But even in Europe and other high-income economies, they account for more than half of total occupancy. This widespread throughout the world highlights the significant employment opportunities created by micro and small enterprises in almost all economic sectors, the international organization explains.