CAN THE MSME’s SURVIVE AND RECOVER AFTER THE COVID-19 PANDEMIC?
Summary: The entire economy is devastated due to the ongoing COVID pandemic but this situation has enabled us to understand few important necessities of our lives and policies that we should have adapted long back. It has highlighted the importance of non physical or digital transactions; it has highlighted the importance to facilitate the public private partnership along with the facilitation of digital transactions into the MSME sector.
With more than 20 lakh people infected worldwide and 1.27 lakh dead, the Covid-19 pandemic shows no signs of wane. As vaccine is yet to be found, lockdowns remain the only way to slow its spread. However, the lockdowns are also pushing major economies to the brink. But on the other hand, the speed at which COVID had been spreading is slowing down now, so the need for long period of lockdowns may come down too.
MSME’s play an outsized role in our livelihoods, National gross domestic products, employment particularly in emerging markets and public and private sector leaders all have a role to play informing and delivering policies that support MSME’s for today, tomorrow and for the years to come.
Policies that have an intentional focus on enabling trusted digital payments and financial services offer opportunities for greater participations in digital ecosystems. We can make interventions now to create policies for the recovery of the MSME’s. These interventions include:
#1 Advancing an open and trusted payment network:
The COVID-19 pandemic has reminded us once again that access to payment is still a big need for the MSME’s, getting support is much more difficult for the quasi-formal and informal business, many of which are in emerging markets. Policy opportunities mainly includes the ease of accessing payments for the MSME’s. Once businesses are connected through formal payment channels financial service providers and policy makers will have more options to extent better financial tools to them including lines of credit, savings and business insurances etc.
#2 Facilitating public private partnership:
By working together the public and private financial institutions can promote and implement the policy solutions needed for long term success. Visa is working to stabilize the security and resiliency of payment system for all.
To know more visit the link: (https://usa.visa.com/about-visa/philanthropy/visa-foundation.html )
#3 Running interface for digital transaction:
Of course going digital is the new normal for us and COVID has made us realize this fact very clearly. In addition to immediate relief for MSME’s through stimulus packages, many governments are promoting digital payments and interactions. In more than 60 countries central bank regulations and bank policies have increased limits for digital payments without signature. The customers do not have to touch the same keypad or digital device nearly as often, which help builds consumer confidence to shop in physical stores.