Africa’s SME businesses further decline due to the ongoing pandemic

Last updated on September 11th, 2021 at 07:57 am

The coronavirus pandemic has caused a double whammy by causing health and economic crises across Africa. It has left a lasting impact on the small and medium-sized enterprises (SMEs) of the nation.

The absence of finance is the second biggest hurdle confronting SMEs hoping to extend their ventures especially in developing business sectors and nations. As indicated by the International Monetary Fund, SMEs are less likely to have the option to get bank loans compared to big firms.

According to Tunde Kehinde, CEO and Founder of Lidya, a digital SME loan providing platform says ” There are various companies like fintech booming. Furthermore, we need to likewise play our part since what we’ve said is that simply utilizing pure data at Lidya, we can find for you a good office, and following day provide you a loan.” 

According to the World Bank, Small and Medium Scale Enterprises (SMEs) constitute most of the businesses and organizations worldwide. They play an essential part in creating new jobs and contribute towards economic growth. But, access to finance is a vital constraint for the majority of SMEs. 

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On Saturday, the cabinet of Sudan said that they will cut its administration spending and raise the social spending. Recently, Sudan completely eliminated subsidies on vehicle petroleum and diesel, and it devalued its currency in February, beginning a flexible managed float policy.

The IMF announced on Tuesday it has secured adequate financing pledges to permit it to provide full debt relief to Sudan, clearing the last obstacle towards more extensive relief on the external debt of around $50 billion.

However, the South African SMEs already have been fighting with a contracting economy, and with COVID-19 that further squeezed the nation’s economy.

Lockdown has caused SMEs to fall steeply and they are being compelled to scale back business budget to just survive. Due to their major role in creating employment, securing and empowering SMEs during these tested times becomes very important.