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Vidur Ramdin: “At times of crisis, communication should be at the forefront of any entrepreneur’s strategy”

Supporting SMEs During the COVID-19 Crisis

Due to its age pyramid and its still unsophisticated economy, Africa, faces a much different urgency that faces the west. It must develop its own path to overcome the pandemic challenge.

Faced with the coronavirus, sub-Saharan Africa presents a radically different profile that of western nations.

In order to overcome this Pandemic and its associated challenges, the countries should be creative and adopt a series of measures to limit the spread of the virus, limit the economic impact and mobilize all energy.

In most of the African economies, SMEs play a far more important role in providing jobs. According to ILO estimates they account for 70 per cent of total employment, making them by far the most important drivers of employment. The majority of these companies operate in traditional sectors, providing very valuable services to society but with limited debt capacity according to usual commercial banking standards.

Business and liquidity have dried up, jobs have been lost, and entrepreneurs have dramatically curtailed if not closed their businesses—at least temporarily.


What are the challenges facing small businesses in Mauritius and Africa? How big is the coming wave?

 The challenges are not for Mauritius and Africa only, the world as a whole is likely to enter into a recession in 2020, according to latest estimates from the International Monetary Fund (IMF). Some sectors will suffer more than others, with the travel, accommodation and food services sectors being hit particularly hard. Businesses themselves are likely to travel through a four-phase process: shutdown, supply-chain disruption, demand depression and finally, recovery. The severity and disruption caused by each stage of the process will depend on the policies adopted by governments. We know the impact will be severe; what we do not know is how long the crisis will last.

How can small businesses and financial institutions recover?

 The answer is critical: Small businesses account for two-thirds of the globe’s jobs and half of its GDP. Businesses in Mauritius with 20 or fewer employees can meet an average of just 10 days’ operating expenses after they suddenly lose income because of a catastrophe, such as severe weather, or calamities. In emerging markets, the upended supply-and-demand cycle hurts businesses even more gravely, multiplying the disease’s economic impact.

“This is an unprecedented situation. The key will be to ensure that businesses are returned to their state before the crisis.”

Different countries are taking different approaches. In Nigeria, for instance, the government has demanded that small businesses be granted a one-year moratorium on all principal repayments. Several Asian countries have introduced emergency loans to support SMEs and flexibility for repayments of existing loans. Banks and microfinance institutions are promoting debit-card usage to limit bank visits and the handling of cash. Human-driven lending processes cannot cope quickly enough during an unprecedented collapse like the current one, thus increasing the importance of new partnerships among government, financial-technology players, and traditional financial institutions.

Mauritius, for instance, and the alternative-lending community—in the shape of fintechs-need to become partners in the government-relief program and will offer free platforms to banks to speed disbursement. This can be an upright solution for SMES facing liquidity issues. I strongly believe MCCI and SME Mauritius can bridge the gaps or facilitate to develop platforms for the Fintechs.


Which measures can we put in place as a matter of urgency now? Which measures should we establish later during the recovery phase?

Every crisis has different phases, during which different types of support measures are needed.

First and foremost, to me, Mauritius needs to create fiscal and monetary policies to provide resources for the interventions (the government has come up with some measures). During the acute crisis, the Government came up with schemes support for SMEs to survive this period (Wage support for instance during the COVID-19 lockdown).

Once the acute crisis is over, the government should focus on supporting the re-initiation of business operations (for instance, straight after the COVID-19 lockdown). In the long term, it should focus on recovery and expansion of business operations. During this phase, it should also think of the possibility to build-back-better, for instance by incentivizing the greening of business operations and products.

Certain measures, like temporary flexibility in the payment dates for social security contributions, can be put in place quickly to deal with sudden and urgent cash-flow shortages in SMEs.  Other measures, like public investment programmes to boost SME demand take longer to develop and may help SMEs during a protracted crisis. Yet another range of measures, such as accelerated depreciation, may help SMEs in the recovery phase as they incentivize investment.

When policies affect SMEs, it is highly relevant that their representatives – both workers and employers – are an active part of them. Social dialogue should play a crucial role in achieving an inclusive crisis response and sustainable routes to recovery that involve SMEs and their workers. The joint search for solutions, the monitoring and evaluation of their implementation, should be part of the agenda.


The Way Forward: How Startups And SMEs Can Navigate The COVID-19 Crisis?

To navigate through the current turmoil, it is vital for businesses to be agile to respond to today’s changing environment in a timely manner. As such, SMEs are advised to identify, focus, and swiftly address the key vulnerable areas to ensure their survival and business continuity.


Entrepreneurs need to separate their focus from the crisis anxiety, and re-evaluate their propositions and business models instead. It is true that a number of SMEs, given their line of business (mainly B2C and digital) are less impacted, or in some cases, have experienced higher profits, regardless of the current crisis. However, it is a common need to revise and redo the old plans, and create new ones as well. Businesses can do so by researching the change in the market demand, identifying the changes in consumer behavior, as well as the possible gaps and opportunities for them to leverage and benefit from. They need to revise their revenue goals and product timelines, create a new business model along with a matching operating plan, and ensure clear and constant communications with the market and their investors.

SMEs need to guarantee churn by developing honest and constant communications with their current clients, adjusting payment terms to encourage early transfers, and developing new price points on current supplies. Entrepreneurs are advised to then move on to explore innovative, and at times, even radical ways to secure new customers, and deliver added value to the market. This can be realized by restructuring the internal resources and capabilities to fine-tune and tailor the current services, as well as to come up with new lines of offerings created for the current demand. As stated previously, building alliances and joining forces with other SMEs will also help cater to the new market dynamics, and prepare the grounds for potential long-term partnerships.

Once the newly adapted propositions are created, it is time to develop the go-to-market strategy, as well as the relevant marketing plans and communication channels. At times of crisis, communication should be at the forefront of any entrepreneur’s strategy to maintain a steady and honest stream of messages with its market. Keep in mind that all efforts should lead to increased credibility and fundability- it is not the survival of the fittest, but the last one standing. Your adaptability is not limited to ensuring liquidity and market offerings. For your business to survive, and to potentially grow, the right enablers must be in place, from a people, processes and technology perspective.

Vidur Ramdin

Director of Communication and Marketing

Fonds de Solidarité Africain.


Vidur Ramdin has conducted several academic researches in SMEs and Quality in Mauritius and the region. The main focus of his PhD research takes a sectorial analysis of numerous industries in which the SMEs are in operation.



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