INTRODUCTION:

The small and medium enterprises are life blood of economy. The health of SMEs is playing significant role in growth of economy. The COVID 19 pandemic has very crucial impact on one of the major contributor i.e. SMEs of economy of nation. The SMEs is the highest employment provider in unorganized sectors. The study carried out by Faal (2020) concluded that due to poor accesses to credit, lack of managerial knowledge and skill sets and lack of access to market are the major reasons of not having desired growth in SMEs in the Gambia.

The small and medium enterprises have been faced problems due to strict restrictions imposed during lockdown of COVID 19 pandemic.

Some sectors of the SMEs, such as lodging, food services and educational institutions are affected due to changes in behavior or priorities of customers, especially maintenance of physical distance and compulsion of lockdown that resulting in restriction of manufacturing activities and other SMEs have closed because of their poor financial condition (André, Kweilin, Deepa, and Silberg, 2020). According to ILO (2020) approximately 75% of SMEs have been experiencing that there is decrease in revenue in 2020. 33% of SMEs are projecting of losing more than half of its revenue and there are no ways of improvement in situation. The countries like Ghana, Myanmar, Bolivia and Columbia have optimistic behavior about future. However, countries like Indonesia, Peru, Tunisia and Pakistan, are expecting major losses in near future. According to Bhalerao (2021) the COVID 19 pandemic has reformed the modes of business of various SMEs around the world. The study conducted by Ayedee and Kumar (2020) concluded that online is new solution for student, colleges and University. The vision of SME is a strategic tool which focuses on future state of the business (Saharia, 2015). The adopted innovative business practices are enabling in achieving organizational objectives (Chatrurvedi and Vats, 2018). The study suggested to entreprenurs to acquire required competecies by attending suitable and required training programs (Usha and Devakumar, 2019).

The network is enabling Garment SME’s to improve international business presence (Udani and Chelliah, 2016). The study found that problems faced by micro and small enterprises are almost similar but the problems are different from medium enterprises (Mittal, Aggarwal, and Rawat, 2017).

This study is trying to explore the COVID 19 pandemic situation and COVID 19 pandemic impact on small and medium enterprises. The COVID 19 pandemic is affected almost all sectors of businesses around the world. Small and medium enterprises are the most affected sector. This study is going to enable major stakeholders of SMEs and the economy at large to know the condition of this one of the imperative sectors of the economy in the COVID 19 pandemic. The televison media played very significant role in maintaining peace and where Government officials are in position to connect with public in communicating the proper guideline of fighting against COVID 19 pandemic (Ayedee and Manocha, 2020). The undertaken study may help SMEs to work on different solutions to gain past glory.

LITERATURE REVIEW:

According to the study of (Dev and Sengupta, 2020), SMEs are the most significant component of the economy and it contributes to economic progress and boosts the gross domestic product of many countries of the world. The COVID 19 has considerably affected the SMEs of the world economy. Millions of SMEs have lost their business plans, the considerable workforce is also affected and the majority of stakeholders of SMEs are affected severely due to COVID 19 pandemic, when economic activities are stops, many companies have stopped their business operations permanently or temporarily. COVID 19 pandemic resulted in a mass layoff, the risk of closure of business was very high as crises are extended, SMEs are financially very weakened and the majority of SME businesses are highly dependent on Coronavirus Aid, Relief and Economic Security Act (Alexander W. Bartik, Glaeser, Luca, and Stanton, 2020). The study conducted found that more than 82% of SMEs have been affected negatively due to COVID 19, and 70% of SMEs believe that they may require another one year to recover the losses and achieve demand before COVI D 19. Almost 60% of SMEs are expecting support from various agencies including Government (The Economic Times, 2021).

The COVID 19 outbreak resulted in a lockdown and it has severely impacted SMEs of China. The imposed lockdown has decreased the demand for products and unavailability of labor was the common phenomenon, in the first wave of the COVID 19 pandemic approximately 80% of SMEs were temporarily closed (Dai, et al., 2021)

The study conducted by (Mirza, Naqvi, Rahat, and Rizvi, 2020) found that due to COVID 19 pandemic more than 5800 businesses are closed, and organizations have downsized their workforce by almost 40%. This situation is responsible for an increase in the unemployment rate and affected the performance of the country’s economy. The study conducted by (Sun, Zhang, Dinca, and Raza, 2021) concluded that there is a significant effect of COVID 19 on SME's profit margin, innovative practices of operations, hybrid work, and satisfaction and safety of stakeholders. According to the survey of (Dimson and Sharma, 2021), different sectors of SMEs have shown a dropped in revenue by 30-90% in 2020, and 40% of SMEs have applied or planning to apply for Government support due to COVID 19 pandemic.

The study conducted by (Pedauga, Sáez, and Delgado-Márquez, 2021) found that due to COVID 19, there is a decline of 43% of SME business activities and two-thirds of the decline in employment. According to the study of (Hebert, 2021), there was a scarcity of raw materials to produce goods by SMEs during the COVID 19 pandemic, and the spending capacity of consumers was decreased, as a result, the revenue generation of SMEs was also decreased. Such a loss of revenue is hampering the capability of SMEs to their business commitments. According to the study of (Bhalerao and Patil, 2021) SMEs have faced issues like employee layoff, issues of health, very poor business operations, available jobs are at risk, and chances of the permanent or temporary closure of businesses due to the COVID 19 pandemic. The technology is enabling the organization to achieve sustainable development. Organizations can use various recent technologies in various functional areas of the business (Bhalerao, Mahale, Jyothi, and Yelikar, 2021). Product innovations may enable SMEs to improve their performance (Abubakar, Abdullahi, and Ibrahim, 2021). Indidustry 4.0 is enablling businesses enhance work life balance, productivity, reduction in production cost and minimization of waste (Kenge and Khan, 2021)

The study conducted by Runyan (2006) examined that small and medium enterprises are severely affected due to crisis because of low preparedness, more dependent on governmental and private agencies, and the bigger financial and psychological effect on the manager or proprietor of SMEs.

OBJECTIVES OF THE STUDY:

1. To explore SME business scenario in COVID 19 pandemic.

2. To examine and discuss impact of COVID 19 on SMEs.

RESEARCH METHODOLOGY:

The foundation of this paper is a literature review. The secondary data is collected from sources like research journals, conference proceedings, reports, and websites. The collected data is used for analyzing and understanding COVID 19 situation and its impact on SMEs.

Impact of COVID 19 Pandemic on small and Medium Enterprises:

In the world, where the COVID 19 appeared, many SMEs had to shut down in a lockdown period which varies from country to country and region to region. However, after lockdown, SMEs were permitted to reopen but SMEs were found difficult to resume business operations. This situation results in further financial losses by SMEs. SMEs are playing significant roles in most economies. They are the drivers of growth, the largest provider of employment, and create new markets. However, during COVID 19 crisis SMEs are the most affected element of the economy.

Manufacturing Distruption:

According to the survey report of FSB (2020), 41% of the United Kingdom’s SMEs had discontinued their business operations and 35% of SMEs are not in a position to reopen again. In Germany, 50% of SMEs are severely impacted due to COVID 19 crisis and one-third of SMEs are projecting a decline in revenue generation by almost more than 10% (DIHK, 2020). In Italy, 70% of SMEs have indicated that they were directly affected due to the COVID 19 pandemic (CAN, 2020). The factory shutdown due to COVID 19 in the European Union, United States of America, and China- which is accounted for 64% of world export and 63% of imports, and expected loss of USD 126 billion in 2020. These lockdowns and shutdowns have very severe repercussions on the global supply chain. In the business chain across the region, approximately 70% of losses projected in African are due to the temporary shutdown of the continent’s supply chain with the European Union. This disruption is also having a negative impact on developing economies (International Trade Centre, 2020).

Authors	Parameters	COVID 19 Pandemic and Manufacturing Disruption
FSB (2020)	Manufacturing Disruption	Due to COVID 19 pandemic 41% of the United Kingdom’s SMEs had stopped their business operations.
DIHK (2020)		In Germany, 50% of SMEs are severely impacted due to COVID 19 crisis.
CAN (2020)		In Italy, 70% of SMEs have indicated that they were directly affected due to the COVID 19 pandemic.
ITC (2020)		The factory shutdown due to COVID 19 in the European Union, USA and China- which is accounted for 64% of world export and 63% of imports, and expected loss of USD 126 billion in 2020

Employment:

The millions of workers are resting in lockdown and businesses are facing issues of short supply of material and struggling to regain normal working conditions (Smith-Bingham and Hariharan, 2020; Sneader and Singhal, 2020). In South Africa, 70% of small and medium enterprises have reduced expenditure of business, and regardless of Govt. efforts majority of SMEs have implemented mass employee layoffs (Agesan, Nomfanelo, and Shakeel, 2020). The study conducted in Europe by McKinsey (2020) found that most of the jobs are at risk and at least two of the three jobs are at risk in SMEs. They project that nearly 59 million jobs i.e. 26% of employment are at risk of a decrease in the number of hours or payments, temporary or permanent layoffs across Europe.

The study carried out by Welter, Wolter and Kranzusch (2020) examined that in a situation where the lockdown due to COVID would be of 2 to 2.5 months, for most of the SMEs the crisis are not leading to the liquidation of the business. If the lockdown continues for more than 6 months, there are significant job losses in millions among SMEs. According to Michael (2020) in New Zealand witnessed a decline in small businesses jobs by 4% during the lockdown of March and April 2020. According to Mexico News Daily (2020), BBVA also projected that around 1 million jobs in formal sectors are already lost due to COVID 19 pandemic and forecasted that the labor market will not be able to recover before 2024.

Closures of Smes:

According to Kyodo News (2020) In Japan, Due to COVID 19 impact bankruptcies suddenly increased by 15% amongst SMEs, especially the lodging and tourism sectors. In Mexico, due to COVID 19, pandemic lockdown around 10,000 organized and 12,000 unorganized businesses are closed down and around 600,000 are at risk of closure (Mexico News Daily, 2020). The study conducted by Fairlie (2020) found that in the United States due to COVID 19 around 22% (3.3 million) business owners have closed their business, 41% of African-American owners of businesses have experienced declined in business, Asian businesses have recorded dropped by 26%, businesses owned by the female are also affected by 25%. In India, about 59% of micro, small and medium enterprises may scale down, sell themselves or close down or shut down because of COVID 19 pandemic (Dave, 2021).

Authors	Parameters	COVID 19 Pandemic and Closures of SMEs
Kyodo News (2020)	Closures of SMEs	In Japan, Due to COVID 19 impact bankruptcies suddenly increased by 15% amongst SMEs, especially the lodging and tourism sectors.
Mexico News Daily (2020)		In Mexico, due to COVID 19, pandemic lockdown around 10,000 organized and 12,000 unorganized businesses are closed down and around 600,000 are at risk of closure.
Fairlie (2020)		In United States due to COVID 19 around 22% (3.3 million) business owners have closed their business,
Dave(2021)		In India, about 59% of micro, small and medium enterprises may scale down, sell themselves or close down or shut down because of COVID 19 pandemic

Policies for Small and Medium Enterprises:

The COVID 19 is impacted almost all sectors of the businesses, especially SMEs are the most affected sector of the economy. SMEs may avail the policies introduced by various Governments around the world for sustaining their business position.

1. The shortening of working hours, granting or giving sick leave, temporary or permanent layoffs. To sustain in the business many SMEs may think of measures like minimizing work hours, layoffs, rightsizing, etc. SMEs can utilize their human resources optimally.

2. SMEs can avail of the schemes introduced by the Government regarding payment of Social Security benefits, Payment of debt, and tax deferral. Such policies are helping SMEs to manage their finance effectively and efficiently.

3. Several countries have introduced financial packages to SMEs. The ease of availability of Grant and Subsidies to SMEs may boost this important sector of the economy.

CONCLUSION:

The COVID 19 pandemic has changed the structures of various SME businesses around the world. Due to COVID 19, SMEs are highly affected in terms of discontinuation in manufacturing and supply chain of the product and services, various jobs in SMEs are at stake in huge quantity and the closure of SMEs are the majors' issues of the economy. Many countries have introduced various policies to improve the conditions of COVID 19 pandemic affected SMEs.

REFERENCES:

1. Agesan, R., Nomfanelo, M., and Shakeel, K. How South African SMEs can survive and thrive post COVID-19 Providing the right support to enable SME growth now and beyond the crisis. Mckinsey and Company.2020.

2. Amish Vinodbhai Udani, Shankar Chelliah. Effect of Network to Knowledge and Experience for Internationalization in Garments SMEs of Gujarat. Asian J. Management. 2016; 7(2): 133-135. DOI: 10.5958/2321-5763.2016.00019.6

4. André, D., Kweilin, E., Deepa, M., and Silberg, J.Which small businesses are most vulnerable to COVID-19—and when. Retrieved from https://www.mckinsey.com/featured insights/americas/which-small-businesses-are-most-vulnerable-to-covid-19-and-when 2020.

5. Bhalerao, Kuldeep. Covid 19 pandemic: changing business model. Business Studies Journal, 2021; 13(5), 1-2

6. Bhalerao, Kuldeep, and Patil, Vaishali. Information and communication technology adoption in small and medium enterprises: Post COVID-19 mantra of success. International Journal of Management and Commerce, 2021;3(1) 27-31.

7. Bhalerao, Kuldeep, Mahale, Prema., Jyothi, N.Vijaya, and Yelikar, Bharati. Technology: A pathway towards sustainability. Academy of Marketing Studies Journal. 2021; 25(5) 1-9.

8. CNA. (2020). Effetti negativi sul 72% delle imprese, oltre 7mila risposte al questionario CNA. https://www.cna.it/effetti-negativi-sul-72-delle-imprese-6-327-risposte-al-questionario-cna/. Accessed 5 August 2021

9. Dai, R., Feng, H., Hu, J., Jin, Q., Li, H., Wang, R., et al. The impact of COVID-19 on small and medium-sized enterprises (SMEs): Evidence from two-wave phone surveys in China. China Economic Review, 2021; 101607.

10. Dave, S. 59% of startups and MSMEs may shut shop, sell off or scale down: Survey. Retrieved August 13, 2021, from https://economictimes.indiatimes.com/small-biz/sme-sector/covid-second-wave-59-of-startups-and-msmes-may-shut-shops-sell-off-or-scale-down-localcircles-survey/articleshow/82974477.cms. 2021.

11. Daniel Joseph Hebert. COVID-19’s Impacts on SMEs and Policy Recommendations in Response. National Law Review. 2021.

12. Dev, S. M., and Sengupta, R. Covid-19: Impact on the Indian economy. Indira Gandhi Institute of Development Research, Mumbai April. 2020.

13. DIHK. Auswirkungen des Corona-Virus auf die deutsche Wirtschaft: DIHK-Blitzumfrage März 2020, Deutsche Industrie- und Handelskammern. Berlin: DIHK.2020.

14. Dimson, J., and Sharma, R. UK small and medium-size enterprises: Impact of the COVID-19 crisis. Retrieved August 5, 2021, from https://www.mckinsey.com/industries/public-and-social-sector/our-insights/uk-small-and-medium-size-enterprises-impact-of-the-covid-19-crisis. 2021.

15. Fairlie, R. The Impact of Covid 19 on small business owners: evidence of early-stage losses from the April 2020 current population survey, No.27309, National Bureau of Economic Research, Cambridge, MA,2020 http://dx.doi.org/10.3386/w27309

16. FSB. One in three closed small firms fear they’ll never reopen amid widespread redundancy plans. Retrieved August 5, 2021, from https://www.fsb.org.uk/resources-page/one-in-three-closed-small-firms-fear-they-ll-never-reopen-amid-widespread-redundancy-plans.html.2020.

17. ILO. MSME: the COVID -19 pandemic and its impact on small business. Retrieved August 7, 2021, from https://www.ilo.org/empent/whatsnew/WCMS_749275/lang--en/index.htm. 2020.

18. International Trade Centre. SME Competitiveness Outlook 2020.

1. https://www.intracen.org/smeco2020/. 2020.

19. Ismaila Abubakar, Ramatu Abdullahi, Hadiza Baba Ibrahim. Moderating Effect of Strategic Improvisation on product Innovation and Performance of Manufacturing SMEs. Asian Journal of Management. 2021; 12(3):237-2. doi: 10.52711/2321-5763.2021.00036

20. K. R. Chaturvedi, Preeti Vats. Exploring Effectiveness level of High Performance Work Practices. Asian Journal of Management. 2018; 9(1):559-564. DOI: 10.5958/2321-5763.2018.00088.4

21. Kyodo News. Coronavirus-linked bankruptcies rise sharply in Japan. Retrieved August 8, 2021, fromhttps://english.kyodonews.net/news/2020/05/8361cbd2068e-coronavirus-linked-bankruptcies-rise-sharply-in-japan.html.2020.

22. McKinsey. Safeguarding Europe’s livelihoods: Mitigating the employment impact of COVID-19. Retrieved August 8, 2021, from https://www.mckinsey.com/industries/public-and-social-sector/our-insights/safeguarding-europes-livelihoods-mitigating-the-employment-impact-of-covid-19.2020.

23. Mexico News Daily. Bank says 600,000 businesses at risk of closing for good due to virus. Retrieved August 8, 2021, from https://mexiconewsdaily.com/news/coronavirus/600000-businesses-at-risk-of-closing-for-good/.2020

24. Michael, A. Three graphs that tell the story of Covid-19’s impact on small businesses. Retrieved August 8, 2021, from https://thespinoff.co.nz/business/04-06-2020/covid-19s-impact-on-small-businesses-in-numbers/.2020.

25. Mirza, N., Naqvi, B., Rahat, B., and Rizvi, S. K. Price reaction, volatility timing and funds’ performance during Covid-19. Finance Research Letters .2020; 101657.

26. Musa L. Faal. Understanding binding Constraints to small and medium Enterprises (SMEs) in The Gambia: A Critical Review. Asian Journal of Management. 2020;11(2):216-221. DOI: 10.5958/2321-5763.2020.00034.7

27. Nishu Ayedee, Sanjay Manocha. Role of Media (Television) in Creating Positive Atmosphere in Covid 19 during Lockdown in India. Asian Journal of Management. 2020; 11(4):370-378. DOI: 10.5958/2321-5763.2020.00057.8

28. Nishu Ayedee, Anuj Kumar. Indian Education System and growing number of online Conferences: Scenario under COVID-19. Asian Journal of Management. 2020;11(4)395-401. DOI: 10.5958/2321-5763.2020.00060.8

29. Pedauga, L., Sáez, F., and Delgado-Márquez, B. Macroeconomic lockdown and SMEs: the impact of the COVID-19 pandemic in Spain. Small Business Economics.2021

30. Peerzada, A. (2021, May 26). Covid-19 impact: Many startups, MSMEs stare at closure, says survey. Retrieved August 8, 2021, from https://www.business-standard.com/article/companies/covid-19-impact-many-startups-msmes-stare-at-closure-says-survey-121052601337_1.html

31. R.K. Mittal, Vijita Singh Aggarwal, Dinesh Rawat. Enhancing competitiveness of MSMEs in India through their integration in Global Supply Chain: A study of challenges faced by firms in Gurgaon auto –Component cluster. Asian J. Management; 2017; 8(1):59-67. DOI: 10.5958/2321-5763.2017.00009.9

32. Rohit Nandkishor Kenge, Zafar Khan. Industry 4.0 latest Trends and it's Application. Asian Journal of Management. 2021; 12(2):181-5. DOI: 10.52711/2321-5763.2021.00027

33. R P Saharia. Corporate Vision of Indian SMEs: A Review of the Literature. Asian J. Management; 6(2): April-June, 2015 page 75-78.

34. Runyan, R. C. Small business in the face of crisis: identifying barriers to recovery from a natural disaster 1. Journal of Contingencies and crisis management ,2006; 12-26.

35. Smith-Bingham, R., and Hariharan, K. This is the impact of the Coronavirus on business. In World Economic forum. Retrieved from www.weforum.org.2020

36. Sneader, K., and Singhal, S. Beyond coronavirus:. Retrieved from

2. https://kinyungu.com/wp-content/uploads/2020/04/McKinseyBeyond-coronavirus-The path-to-the-next-normal.pdf.2020.

37. Sun, T., Zhang, W.-W., Dinca, M. S., and Raza, Muhammad. Determining the impact of Covid-19 on the business norms and performance of SMEs in China. Economic Research-Ekonomska Istraživanja .2021;1(20). doi: 10.1080/1331677X.2021.1937261

38. The Economic Times. (2021, April 22). Dun and Bradstreet: Over 82% of SMEs had negative impact during Covid-19. Retrieved August 4, 2021, from https://economictimes.indiatimes.com/small-biz/sme-sector/dun-bradstreet-over-82-of-smes-had-negative-impact-during-covid-19/articleshow/82197779.cms?from=mdr

39. Usha N., G. Devakumar. Determinants of Sustainable Business with Respect to Agricultural Engineering Manufacturing Companies.Asian Journal of Management. 2019; 10(1): 61-66. DOI: 10.5958/2321-5763.2019.00011.8

40. Welter, F., H. Wolter and P. Kranzusch. Preliminary assessments of the IFM Bonn on the economic impact of the coronavirus pandemic on the “Mittelstand” businesses in Germany, IFM-background paper, IFM, Bonn.2020

Received on 14.08.2021 Modified on 14.01.2022

Asian Journal of Management. 2022;13(2):115-119.

DOI: 10.52711/2321-5763.2022.00021

Authors	Parameters	COVID 19 Pandemic and Employment
Smith-Bingham and Hariharan, 2020; Sneader and Singhal, 2020	Employment	The millions of workers are resting in lockdown and businesses are facing issues of short supply of material and struggling to regain normal working conditions
Agesan, Nomfanelo, and Shakeel (2020).		In South Africa, 70% of small and medium enterprises have reduced expenditure of business, and regardless of Govt. efforts majority of SMEs have implemented mass employee layoffs.
McKinsey (2020)		COVID 19 situation has influenced majority of jobs and at least two of the three jobs are at risk in SMEs. They project that nearly 59 million jobs i.e. 26 % of employment are at risk of a decrease in the number of hours or payments, temporary or permanent layoffs across Europe.
Mexico News Daily (2020)		BBVA also projected that around 1 million jobs in formal sectors are already lost due to COVID 19 pandemic