How Countries Are Helping Small Businesses Survive COVID-19
IMF Blog, March 9, 2021
Source details
- Canonical URL
- How Countries Are Helping Small Businesses Survive COVID-19
Other formats
Bibliographic details
- Authors: Kazuko Shirono, Esha Chhabra, Yingjie Fan
- Published: March 9, 2021
Context and authorship
- Chart of the Week
- COVID-19
- Kazuko Shirono, Esha Chhabra, Yingjie Fan
- March 9, 2021
Economic impact on small businesses
- The economic downturn caused by the pandemic has taken a painful toll on small businesses; scores of retail businesses have permanently closed in cities around the world since the Great Lockdown in the spring of 2020.
- Small and medium enterprises account for:
- "half to two-thirds of private sector employment in the United States and the European Union, respectively"
- "close to 40 percent of national income in emerging economies."
- Without government support, the failure rate of small businesses could increase "by as much as 9 percentage points."
Main findings from the IMF’s Financial Access COVID-19 Policy Tracker (130 countries)
- Overall adoption rates of policy measures to help cash-strapped small businesses:
- Financial assistance such as grants: 77 percent of countries
- Public guarantees on loans: 50 percent of countries
- Delays in loan repayments: 30 percent of countries
- Tax relief: 28 percent of countries
- Lower interest rates: 24 percent of countries
- Variation by income group:
- High- and middle-income countries:
- Averaged 2.5 and 1.9 measures, respectively
- About 80 percent implemented financial assistance
- Other measures account for a smaller share, ranging "from 20 to 60 percent"
- Example: Bolivia, Botswana, and India adopted both financial assistance and loan guarantees
- Low-income countries:
- No low-income country in the policy tracker adopted more than two measures
- Financial assistance adopted by 75 percent of low-income countries
- Tax relief adopted by 33 percent of low-income countries
- Examples: Mali, Rwanda, and Uganda
Policy implications and use of the tracker
- Monitoring policy measures to support people and small businesses will be critical as countries prepare for the recovery.
- The policy tracker can help policymakers:
- Identify effective policies
- Share experiences
- Learn from each other
Source: IMF Blog — "How Countries Are Helping Small Businesses Survive COVID-19" (Kazuko Shirono, Esha Chhabra, Yingjie Fan, March 9, 2021).
Content in this bundle
- Financial Access COVID-19 Policy Tracker