Development Trends of Small and Medium-sized Enterprises Amid Pandemic-Induced Crisis

Abstract

Against the backdrop of coronavirus pandemic-induced economic crises, small and medium business sector oriented towards off-line services provision has been worst-hit. In reality, demand for services provided by catering, entertainment, tourism, hospitality, beauty-business, and non-food retail has declined several-fold amid lockdown. This being said, the need to pay wages, taxes, social contributions, rental charges, bank credit interest, and contractors for supplies and other services has remained. All types of businesses who missed the chance to switchover to online services provision or stick to business model for rendering exclusively personal off-line services to date are exposed to bankruptcy risk. Cash gap is on the rise that can lead to bankruptcy of multiple small and medium-sized enterprises (SME) unable rapidly and without losing work performance to switchover to the online regime especially in large Russian cities. In this memorandum we present assessment of the crisis impact on income, employment, lending, and the number of SMEs.