Despite several businesses remaining closed during the lockdown, 81 per cent of micro enterprises polled are confident of a recovery post COVID-19 whereas 57 per cent reported not having any cash reserves to survive, according to a survey. Initial results of a six-month survey that is underway by GAME (Global Alliance for Mass Entrepreneurship) in association with LEAD at Krea University covering 1,500 micro enterprises also reveal that 40 per cent tried to borrow money to cover expenses.
However, only 14 per cent of the overall borrowing was from formal borrowing sources.
As per the revised criteria, any firm with investment up to Rs 1 crore and turnover under Rs 5 crore is classified as a “micro” enterprise.
Madan Padaki, co-founder of GAME, said COVID-19 has left a devastating impact on the Indian economy, especially micro-enterprises that comprise around 99 per cent of all firms in India.
“Through this longitudinal survey, we intend to truly understand the on-ground situation and challenges faced by microenterprises in managing cash flows, dealing with broken supply chains and delayed payments. By keeping our ears to the ground, we want to provide specific recommendations to all ecosystem actors to accelerate the recovery of these enterprises,” Padaki said.
The survey also revealed that across all respondents, female business owners faced more household challenges than men.
In fact, 70 per cent female business owners suggested inter house conflicts as the biggest challenge while 53 per cent men responded to the same. Women also faced more unaffordable expenses than men, with 46 per cent suggesting the same, the survey said.