A Comparative Assessment of the Effects of COVID-19 on Small and Medium Enterprises (SMEs) in Selected Townships of Lusaka, Zambia
Keywords:Assessment, Effects of Covid-19, SMEs, Lusaka
The outbreak of the Coronavirus of 2019 (COVID_19) has affected the entire globe socially and economically. It has affected the way of doing business between and within countries. The Small and Medium Enterprises (SMEs) have been heavily affected by the outbreak of COVID-19 in these countries. This study aimed at assessing the effect of COVID-19 on the SMEs due to the significant roles they play in an economy, such as; creating employment and contributing to the national GDP. Therefore, the study explored the activities of the SMEs by comparing their performance two years before the outbreak of COVID-19 and immediately after. Hence the snowballing method of selection was used to ensure only SMEs whose businesses were operational at least two years before the outbreak were selected for the research. The Selected SMEs were also registered with the local authorities such as Zambia Revenue Authority, PACRA and the City council. The overall objective of the study was to assess the effect of COVID-19 on the performance of SMEs in the selected townships of Lusaka, Zambia and the data for the research was collected using the mixed method approach to ensure sufficient information was collected for the study. The results of the research showed that there was a reduction in revenue, number of customers, as well as orders for goods and services by the consumers after the outbreak of COVID-19. Additionally, the results showed that there was a disruption in supply of good and services, an increase in inflation, shortage of essential goods and an increase in unemployment. However, the SMEs came up with mitigation measures to survive the effects of COVID-19. They put up measures such as offering promotions, credit and discounts to royal customers, extended their working hours, shared spaces with other business to reduce the costs of rentals, stocked only products with high demand to reduce the inventory days. The SMEs also changed suppliers to cheaper and more reliable one to ensure that they didn’t runout of essential stock. There was also an increase in the use of electronic business (E-Commerce). The SMEs started advertising their products and services on social media platforms, conducted virtual meetings and trainings. And to ensure that they had capital for their business, the SMEs formed informal banking group called village banking. Therefore, the SMEs have shown that they are able to adapt to change in the environment so as to ensure that their business survive.