Micro, small and medium enterprises (MSMEs) are “extremely vulnerable to external shocks and poor business environments” due to the Covid-19 pandemic as indicated in the June 2020 International Labour Office policy brief.
According to this brief, one of the government’s objectives when elaborating recovery plans should be to strengthen= the private sector’s capacity to respond to disrupted markets: “MSMEs require a conducive business environment and a supportive entrepreneurial and innovation ecosystem. One that promotes productivity and better working conditions for MSMEs.”
To support small businesses in the US and other countries, Mastercard announced a commitment of $250 million over five years. This amount will be spent for the financial security and vitality of small businesses and their workers. As part of this commitment, the company will provide “free cyber vulnerability assessments and identity theft protection to the 28 million small businesses eligible to participate in the Small Business Administration’s Paycheck Protection Program”, as well as support to “help them understand consumer spending trends in their communities”.
Michael Miebach, President of Mastercard commented that “When our small businesses suffer our nation suffers, so it is incumbent upon all to ensure that we’re supporting the businesses who are the lifeblood of our economy and pillars of our communities. We are leveraging our network, insights, technology and partnerships to deliver the resources small business owners need now to help them sustain their business as they quickly adapt to a new way of operating and evolved customer needs”.
In addition, Mastercard committed INR 250 crores (USD 33 million) to help reboot Indian SMEs and enable business recovery. The company announced its intention to:
- “help small businesses by growing digital payments awareness and providing low-cost acceptance solutions – online and offline – that are simple, safe and secure;
- drive inclusive growth by enabling small merchants and kirana stores with access to credit, knowledge and tools that will drive operational efficiencies; and
- empower women entrepreneurs by increasing their business acumen”.
The digitalisation of business and access to financing are clearly two key elements to maintain small businesses afloat in these difficult times and hopefully Mastercard example will set the tone for opportune government’s supportive initiatives.