Small businesses with health risks struggling to survive: Survey

A recent survey has found that small businesses that involve a lot of health risks are struggling to survive amid the pandemic.

The results of the survey show that the economy has been recovering from the Covid-19 epidemic, but it is not the same for all industries. The impact of the pandemic still exists financially and emotionally among employees of small and medium enterprises where 56% of the total population of the country works. A quarter of the GDP of Bangladesh comes from this sector, according to the survey.

It said organisations with female workers and involving high health risks, such as beauty parlors, lag far behind in coping with the epidemic.

Professor Asad Islam, director of Center for Development Economics and Sustainability (CDES), Monash University, and Atiya Rahman, senior research associate at BRAC Institute of Governance and Development, presented the results of the survey in a webinar titled "How has Covid-19 Affected Micro Enterprises and Workers in Bangladesh?" on Monday night.  

The BIGD and the Monash University in Australia conducted the mobile phone survey on the impact of the Covid-19 epidemic on small and medium enterprises. The first phase of the survey was conducted in June 2020. The second phase was completed in January 2021.

Most of the companies participating in the survey were in the light engineering sector, while 16% were in the service sector such as tailors or beauty parlors.

After the first lockdown, the unemployment rate for male workers fell by 15% in June 2020, but it has remained unchanged since then. In the case of women workers, unemployment rose to 54% at the beginning of this year. 

Eight months after the first lockdown was suspended, women's incomes fell by 56% and men's by 24%. At the same time the stress of unemployed women has increased significantly during the epidemic.

According to the survey, from April 2020 to January 2021, most businesses have taken loans. A quarter of these loans came from NGOs, and up to 16% came from families or trusted individuals. Only 4% of small businesses received government assistance.

Although there is a stimulus package for most small enterprises, only 1% of the small business owners in the country have received this benefit against the application submitted by 6% entrepreneurs.

The applicants said the lengthy application process and the banking issues were the main hurdle in the application process for the stimulus package.

BIGD Executive Director Dr Imran Matin said small businesses that are at greater health risk are more likely to be hit by the epidemic. After the lockdown 97% small businesses reopened, but sales of services such as beauty parlors and cosmetics, clothing and tailors, grocery stores, grill workshops and restaurants fell by 17% compared to the pre-Covid-19 period.

Sales of beauty parlors and cosmetics stores, which are owned and run by women workers, are down 57% from the pre-Covid-19 period.

Entrepreneurs are worried as the amount of orders fell even eight months after the first lockdown was suspended. 

More than 50% of entrepreneurs, especially those involved in the light engineering industry, have expressed concern over rising raw material prices. Dr Imran Matin noted the importance of a thorough analysis of the supply chain in the sector. 

Bangladesh Institute of Development Studies (BIDS) Research Director Dr Monzur Hossain said the government could involve the NGOs in planning how the incentive packages would be distributed, because NGOs have been playing a big role in providing such assistance to small scale industries.