Impact of COVID-19 on Small and Medium-sized Enterprises (SMEs) in Bangladesh: An Owner-centric Study

Abstract

Small and medium-sized enterprises (SMEs) are an essential part of Bangladesh's economy, contributing significantly to the country's gross domestic product (GDP). The study aims to investigate the impact of COVID-19 pandemic on the owners of SMEs in Bangladesh. To serve this purpose, cross-sectional data were collected from 103 participants using a purposive sampling technique. We generated different frequency distribution tables based on our inputted data, and then the results of the study were presented using descriptive statistics. The results of the study showed that 58.3% of the SMEs were completely shut down due to COVID-19 pandemic. We also observed that the demand for goods reduced by 83.5%, while production costs increased by 21.4%. Thus, the overall production of goods in SMEs decreased by 48.5%. Most of the owners (90.3%) stated that their profit was dropped by 50% to 100% during corona pandemic, and 68.9% of owners had to retrench workers from their organizations to reduce costs. Approximately, 78.3% of respondents stated that their products remained unsold from 10% to 70% during the pandemic. The findings suggest that policymakers should advance the SME sector by incorporating e-commerce, more favorable government policies, facilitating bank loans, and establishing new training institutions to solve the existing drawbacks of this sector.