A SURVEY has revealed that 72 per cent of Zambian businesses are unable to raise funds due to COVID-19, with the lowest income segments being particularly vulnerable to the economic impacts of the pandemic.
The FSD Zambia Impact Survey results show that Zambian businesses critically need working capital, with 72 per cent of businesses unable to raise funds, but remained confident and optimistic about recovery.
“Highlight results of a Survey on the Financial Impact of COVID-19 on Micro and Small Enterprises (MSEs) conducted by FSD Zambia in collaboration with BFA Global show that Zambian businesses critically need working capital, with 72 per cent of businesses unable to raise funds. The research, which was aimed at understanding the economic situation from the perspective of MSEs, shows that about 40 per cent of MSEs are seeing a significant decrease in revenues. The Survey was also designed to assess MSE digital readiness as a method to limit the impact of COVID-19. Despite these odds, most MSEs foresee continuing operations. They are confident that their business revenue is enough for the same level of production and are optimistic about recovery,” read the statement issued by FSD Zambia communications manager Eneyah Phiri.
“As recent studies have shown, the lowest income segments are particularly vulnerable to the economic impact of the coronavirus pandemic and the resulting economic slowdown.”
The Survey also revealed that most respondents planned to increase the use of digital applications in the functionalities of their businesses.
“The Survey results also show that the use of digital applications to conduct business was widespread among these small enterprises. The primary activities included marketing (72 per cent), receiving payments (68 per cent), completing sales (51 per cent), and operations (45 per cent). Most respondents plan to increase the use of digital applications in the functionalities of their businesses. The result highlights can help FSD Zambia, government and other financial market players to fill the gap in digital technology, to facilitate commerce, not only in the time of COVID-19, but in the near future. As MSEs are encouraged to adopt the use of digital platforms, partnerships, among key stakeholders of the sector, should aim to improve Internet connectivity issues, technological infrastructure and lower prices of digital financial services,” the statement read.
And FSD Zambia chief executive officer Betty Wilkinson stated that the organisation will be working to help financial institutions grow working capital loans and expand their own Working Capital Access project to help these enterprises survive and thrive.
Meanwhile, FSD Zambia director – analytics Floyd Mwansa said assessing the impact of COVID-19 on SMEs remained vital as the country needed key insights for policymakers and other market players so they could design interventions that helped MSEs navigate through the current economic meltdown.
The Survey by FSD Zambia and BFA Global was conducted to better understand the effects of the crisis on MSEs in the country.
The first wave of the Survey polled 170 self-employed, traders and other micro and small entrepreneurs.
About 33 per cent of the respondents were women and 67 per cent being men, with 71 per cent residing in urban areas, while the rest derived from peri-urban and rural areas.
