COVID-19 pandemic has impacted on millions of lives and livelihoods. Since its emergence in 2019/2020, lives have been lost, businesses halted and jobs lost across the world. Different sectors, regions and communities of people have been affected in different ways with COVID-19 exposing and increasing existing vulnerabilities.

Micro, Small and Medium Enterprises (MSMEs) have been disproportionately impacted by the crisis, including loss of revenue owing to disruptions in supply chains, declining consumers and loss of labor. This is attributable to their size, liquidity, access to capital and proneness to informality which make them more vulnerable to extreme disturbances and economic shocks. Operating in the informal economy also makes MSMEs less likely to benefit from government and private sector initiatives, such as moratoriums, tax reliefs, emergency financial support and grants. 

In August 2020, United Nations Development Programme (UNDP) through the UNDP Accelerator Lab in conjunction with Micro and Small Enterprise Authority (MSEA) undertook an assessment of the impact of the COVID-19 pandemic on MSMEs. A total of 580 MSMEs took part in the survey which was conducted both online and offline. The objective of this assessment was to inform existing or new areas of support for MSMEs and identify gaps and opportunities that would stimulate and accelerate economic growth for the sector during and beyond COVID-19.

This report is a gender responsive analysis of characteristics of Micro Small and Medium enterprises, impact of the COVID-19 pandemic on operations and income, challenges faced by the sector with the mitigation mechanisms and the support and needs expressed by respondents. It goes further to analyze digital maturity of the enterprises as well as the support needed to facilitate digital transformation as a key strategy to achieve sustained competitiveness of MSMEs.