On the Economic Frontlines of COVID-19: Early Insights From MSMEs Grappling With the Crisis

The data from CFI’s surveys on emerging-market micro, small and medium enterprises (MSMEs) tells a stark tale: COVID-19 has closed 15 percent of all businesses; 83 percent of operating MSMEs have seen a dramatic decline in profits, leading to struggles covering operating expenses; 46 percent of closed MSMEs report government-imposed restrictions on movement as the most direct cause of their business closure. There is no obvious "best practice" coping strategy MSMEs are using, and it’s a tough road for many MSMEs trying to return to pre-pandemic financial health.

This brief contains insights needed to support MSME recovery. It summarizes and analyzes the first wave of data from a research project on the financial health of MSME owners/operators during COVID-19. At the program’s core is a longitudinal, six-wave survey in four countries: Colombia, India, Indonesia, and Nigeria. Armed with the right insights and data, policymakers and other ecosystem actors can target interventions that help rather than harm.