The resilience of SMEs versus other countries

According to the study on Business Demography (EDN) of 2020 published by the National Institute of Statistics and Geography (INEGI), of the 4.9 million micro, small and medium-sized companies that existed in 2019, 3.85 million survived, Although it is not directly related to the pandemic, in this survey it is mentioned that only 7.8% had some support, either from the federal, state or municipal level; Some of these supports were cash transfers, deferral of credit payments, access to new credits.

However, institutions such as ECLAC's Covid-19 Observatory in America and the Caribbean, which has indicated that Mexico has been one of the countries that has not integrated the necessary business support policies, as well as the International Monetary Fund, since the efforts emergency support have been the lowest within the G20 and Latin America and is this true?

We know that in Mexico the pandemic was declared on March 30, 2020, with this the immediate suspension of non-essential activities, together with the epidemiological traffic light, is how certain sectors have gradually reopened. Until December 2020, 10 support measures for MiPymes had been highlighted, among them support such as Credits of up to 25 thousand Mexican pesos for small and medium-sized entrepreneurs, support for "solidarity companies" (Those that maintained their workforce on average) , the Tandas para el Bienestar, as well as the MiPymes MX initiative, a platform where the public and private sectors interact, offering various tools to promote this ecosystem, as well as business roundtables, the "Mercado Solidario" platform for the socialization of commercial information and a self-assessment online for evaluation of your health safety protocols. In labor issues, only legal advice and follow-up was provided in the event of dismissal and suspension of work, regarding the granting of liquidity facilities, low electricity consumption rates, deferral or partial payment of payments for up to 4 months were allowed.

For the Federal Government, it has been one of the great efforts that have been made during the pandemic, and it is worth asking, how has it been in other countries? Have they really been great support for SMEs? For this we will review the members of the Pacific Alliance, we will start with Chile.

The institution in charge of carrying out, monitoring and evaluating was the Ministry of Economy, Development and Tourism, a few days after the Pandemic was declared, the "Emergency Plan" was created, which among its many axes of attention created one for MiPymes that, Broadly speaking, it consisted of carrying out actions to provide liquidity such as: suspension of provisional tax payments, early return of taxes, postponing VAT payments, extensions of contribution payments; regarding employment, income protection subsidies were granted to independent workers as well as bonuses for the middle class; Finally, for financing, credit operations were granted that supported micro and small companies, going through medium and large companies (all valued according to their annual sales). The Plan also contemplates initiatives focused on digitization, the most important being the launch of a Platform Digitize your SME, which consists of a digital check, access to content, support, promotional spaces, and access to markets.

In August, President Piñera presented a new Plan called "Step by step, Chile recovers", whose main objective is to establish phases for the reopening of activities and recover lost jobs. This plan is divided into four axes: Incentives employment, investment, support for SMEs; and Streamlining and Simplification of Permits. Due to the nature of this article, we will focus on the new actions launched to support MiPymes, support for micro and small businesses in any economic sector was maintained, with special emphasis on those in the tourism sector, for all of these a subprogram was made. to support the financing of measures to comply with sanitary protocols; The financing lines are through the Crece Fund, which is for Non-Bank Financial Institutions, FOGAIN supporting short and long-term credit operations for companies to make investments enabling business growth, MSME Credit through Non-Bank Financial Intermediaries and a Competitive Fund for those projects focused on digitization; Economic consultancies were promoted for re-entrepreneurship that range from financial, economic and accounting analysis, in collaboration with trade organizations, work tables were held to socialize the progress of the plan, learn about the concerns and needs of the different industries. A special effort to promote campaigns to promote and encourage national tourism, a package of 1000 million and through the Regional Governments to raise an additional 1000 million. Finally, a law was promoted that allowed SMEs a tax break and liquidity, among them the First Category tax of the ProPyme Regime was lowered, being the lowest in the last 30 years, the reduction of the rate of provisional payments, as well as a voucher and loan for basic, collective taxis, school and public transport in urban and rural regions

To continue with this analysis, we will continue with Colombia. As of mid-March, various legislative decrees were created to attend to different areas such as public services, facilities for financial and tax obligations, employment protection, access to financing for economic activities, in total and up to December 2020 they have been granted. 29 measures focused on Financing, Liquidity, Employment and Production Support, in liquidity issues a support program for debtors was created, tax exemptions were made for hotel services, restaurants, cafeterias, pastry shops and bars; employment support program such as modification to the working day, salary agreement, temporary suspension of pension contributions; Regarding financing issues, the agricultural sector was especially focused to maintain its capacity, discounts were granted to small producers for working capital, production support was also promoted through certification processes in biosafety protocols that would benefit 500 MiPymes per year, one of the most relevant was the "Compra Lo Nuestro" tool that promoted the online purchase of national products for free, as well as the connection between suppliers and buyers.

It should be noted that the above information is taken based on the ECLAC publication, "Analysis of support policies for SMEs to face the COVID-19 pandemic in Latin America", however in this document you will not be able to find detail what was done by Peru, given that it was not selected within the nine sample countries taken for this study, for this we go back to the information issued by the Ministry of Economy and Finance, the measures are presented below.

Until October 2020, 33 decrees had been issued, of which two were completely to issue support measures for Mypes (micro and small companies). The first of them published on March 20, 2020, which were complementary measures to the "National Preparedness and Response Plan against the risk of introduction of the Coronavirus 2019-nCoV", in which it is identified that Mypes have vulnerabilities in this pandemic since they represent an important sector in productive development, which is why this decree creates the Business Support Fund (FAE-MYPE) to guarantee credits that allow them to restructure and refinance their debts, this fund would have the sum of 300,000,000 (three hundred million soles ), the Development Bank of Peru (COFIDE) is also allowed to participate as trustee and trustee of said fund.

The second decree issued on April 27, 2020 is considered necessary to approve complementary measures to strengthen the management of the Business Support Fund for MYPE, through the allocation of new resources, providing that the destination of the credits is exclusively for working capital and establishing new individual guarantee limits; the eligibility criteria to be beneficiaries of the fund are broadened, mainly.

In October 2020, a decree would be issued for the tourism sector, through the Business Support Fund for the Tourism Sector (FAE-Tourism); Some other support measures that were carried out over the months were the extension of the tax declaration and corresponding monthly payment from February to August 2020.

And on the other side of the pond, how has support for SMEs been taken?

The European Commission through the COSME Program (Program for the Competitiveness of Companies and for Small and Medium Enterprises) have promoted the guarantee mechanisms for long-term capital loans, whether they are 12 months or more, in the same way credit vacations allowing delays in existing loan repayments. The European Investment Bank offered up to 40 billion euros to support SMEs and midcaps; Likewise, different strategies have been developed to restore trust between consumers and companies, stimulate investment and, in this recovery phase, migrate towards a sustainable and digital stage. Some cases stand out, such as Germany with the creation of a state fund to guarantee bonds, loans and company obligations; In France, a Solidarity Fund of 120 billion euros was also created.

The objective for readers is to take a brief look at the support measures that other countries have granted to solve the impact on one of the hardest-hit sectors and that in most economies represent at least 2 out of 3 jobs, almost 99% of companies; Many of them, being family members, have had to make enormous sacrifices to stay on their feet, be able to pay salaries, comply with health protocols, etc...

In Mexico, in the months of total closure it was total suffocation and above all, without any significant support to be able to survive, now with the possible third wave of infections, we will probably experience a new total closure and this will once again mean a huge sacrifice from all of us. The owners, we also know the complications that the Government faces but understand that both the business sector and its different levels of government must walk together for the sole benefit of growing the economy and therefore, the development of the country. It may not be the last pandemic we will experience, but this is a great lesson in the importance of synergizing, forming alliances, listening and acting.