Small and medium enterprises were one of the many casualties of the pandemic. While SMEs were thriving before the pandemic, the lack of digital storefront and digitisation strategy pulled them back. Another thing that stopped the progress of a number of small and medium enterprises during the pandemic is lack of funding.
A new report from Netherlands-based cloud banking platform Mambu shows that more than two-thirds (67 per cent) of small and medium sized enterprises (SMEs) globally were unable to secure sufficient or any funding on at least one or more occasions. The report shows how SME lending could become a major roadblock to economic development and job creation.
Small Business, Big Growth report: what you need to know
The Small Business, Big Growth report is an annual survey by fintech platform Mambu that sees participation from more than 1,000 SME owners globally. This year’s report, in particular, paints a grim picture of how SMEs have struggled to get funding since the pandemic. The report shows that 32 per cent of the SMEs that launched since the pandemic and 33 per cent of launching soon found it difficult to secure starting capital.
This is higher than 28 per cent of SMEs launched before March 2020, translating to an increase of 17.5 per cent. The SMEs make up around 90 per cent of businesses worldwide and employ more than half of the global workforce. According to the World Bank, the formal small and medium enterprises (SMEs) contribute up to 40 per cent of global domestic product (GDP) in emerging countries.