The importance of micro, small and medium-sized enterprises (MSMEs) for the economic development of every nation has been starkly highlighted recently, with the Covid-19 crisis ravaging many countries across the world. A global survey conducted by the International Trade Centre in 136 countries found that 62% of women-led small businesses have been severely affected by the pandemic, and over 50% of MSMEs led by men are doddering from the adverse effects of the pandemic. The survey also found that economic and green recovery of the world is impossible without revival of the MSME sector as the micro, small and medium enterprises comprise over 90% of the businesses in most countries, provide 70% of jobs, and contribute to 50% of GDP.
So, the role of the MSMEs in the global and national economies had to be reassessed. In April 2017, the UN General Assembly had declared June 27 as the International MSMEs Day. The theme set for 2021 was ‘MSME 2021: Key to an inclusive and sustainable recovery.’ With this, the UN has reaffirmed the role of MSMEs as the backbone of national and global economies. The recovery and development of MSMEs have become the top priority to create future-proof and sustainable economies. Meanwhile, economists predict that the global workforce will require at least 600 million jobs by 2030. With MSMEs providing 70% of employment in the emerging markets, nations are worried about what will happen if MSMEs cannot sustain their growth.
According to the International Finance Corporation (IFC), the private-sector lending arm of the World Bank, about half of the registered SMEs in developing countries do not have access to formal credit. The gap is more significant when micro and informal enterprises join the pool. So, governments in many countries are rewriting budgets and policies to remove the critical constraint faced by MSMEs — access to finance. And banks, fintech companies, and various government organizations worldwide are moving fast to bail out MSMEs and put them back on the growth path because, if MSMEs fail, nations will lose their economic backbones.