Business

1.1 million MSMEs close in Mexico in less than a year and a half

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The National Institute of Statistics and Geography (INEGI) reported that they registered in the past 17 months Closure of more than a million micro, small and medium-sized enterprises (MSMEs). The health crisis has significantly reduced the incomes of these facilities and led many to bankruptcy.

1.1 million MSMEs close in Mexico in less than a year and a half
1.1 million MSMEs close in Mexico in less than a year and a half

According to data from Economic census 2019Of the 4.9 million registered MSMEs, only 3.9 million (79.19%) survived. But still, One million ten thousand 857 (20.81%) had to close permanently.

Between May 2019 and September 2020 there was an 8.06% decrease in economic units. Small and medium-sized businesses were hit harder with 21.17% of closings, compared to 20.8% of micro-businesses.

Through economic activity, Non-financial private service companies recorded the highest percentage of victims at 24.92%. It follows trade (18.98%) and manufactures (fifteen%).

In the same period 619,443 facilities were openedwho make up 12.75% of the country’s business population. Of this, 13.75% are in the trade sector, 12.85% in non-financial private services and 8.78 in the manufacturing sector. 1.23 million people work in these new companies, according to the institute.

How COVID-19 affected Mexican MSMEs

The second edition of the Survey on the economic impact of COVID-19 (ECOVID-IE), found that of 1,873,564 companies in the country the 86.6% had an impairment due to the pandemic.

While presenting the survey, INEGI President Julio Santaella stated that while this is important, it was down almost seven percentage points from the first edition, when 93.2% of companies said they had an impact, “That is good news because there are fewer affects. “

The survey found that 23.1% of the companies requested temporary closures or technical interruptionsThis is a value lower than the percentage recorded in the first edition in April when the percentage was 59.6%.

What hurt business the most was that Decline in income that was 79.2% of the companies. In the first edition, the proportion was 85.1%. In second place was Demand is falling (51.2%), while in the first edition it was 67.6%. The third place is occupied by Lack of receipt and / or products that show a decrease of almost 9 percentage points from issue to issue.

What do companies need to survive the pandemic?

INEGI asked executives of the company what measures are required in the situation caused by COVID-19. 61.3% said they needed tax assistance40.6% mentioned this Deferring payments to loans or services34.4% said that Money transfers and 30% said it was necessary Access to new credits.

The analysis also showed how long companies with the same income level can continue to work. A high percentage of large companies said they can survive for 12 months or more For most MSMEs, survival is 3 to less than 12 months.

Companies had to adjust to the new dynamics of the pandemic. Almost 50% think they should incorporate that Internet sales permanent as well offer new products and services, to adopt work shifts, Work from home (Home office) and Diversify supply chains.

This year 2020, the coronavirus crisis in Mexico has caused more than 107,000 deaths and more than 1 million 133,000 confirmed cases a 9.6% decline in GDP in the first nine months of the year.

See also: The pandemic closes 7 companies every hour, according to Endeavor

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