The Small to Medium Enterprises (SME) sector will predominantly survive the vagaries of the Covid-19 pandemic due to its fluid nature to adapt to changes in the economy, a sectorial lobby group has said.
In an interview with 263Chat Business, executive director for the SME Association of Zimbabwe, Farai Mutambanengwe acknowledged the negative impact the pandemic has had on business in general, but stressed that the SME sector was most likely to come out of the pandemic stronger despite challenges.
“Obviously there is a huge impact (from the pandemic) but SMEs are fluid by nature. What you realise is that people will just reorganize themselves. If they realise one area of business is not working out they just drop it and repurpose themselves,” said Mutambanengwe.
Most SMEs have found it difficult to operate under the current lockdown measures put in place by the government to curb the spread of the second wave of the coronavirus.
An insight into their operations during the lockdown has shown that most of them have devised innovative ways of sustaining livelihoods through working remotely by use of various technologies to link with customers.
Digital applications such as WhatsApp, Facebook and customised websites have become huge market places to connect with customers.
However, some SMEs have found new business opportunities emerging from the lockdown restrictions on movement by venturing in delivery business using connections to acquire exemption letters from authorities.
“You find that if one had a kombi business which is now not operational during lockdown, they can move into transportation of essential food products and this is just one example of how SMEs have managed to survive,” said Mutambanengwe.
The development comes after the Zimbabwe National Chamber of Commerce (ZNCC) recently released a study stating that nearly half of small businesses in the country were likely to fail to reopen post Covid-19 pandemic.
The study states that due to lack of a stimulus package with favourable terms readily available for small businesses, most enterprises were likely to fall on hard ground.
SMEs contribute around 60 percent of the gross domestic product, and create over 70 percent of employment in the country.
However, due to lack of government support to the sector, many businesses have taken a hard hit since the advent of the pandemic in March last year.