Bankruptcy looms for 512 businesses: Survey
Minister for Commerce and Trade Faiyaz Koya revealed this in parliament today while responding to a question on the purpose of the Business Survey the Ministry conducted in partnership with International Finance Corporation
Koya says over 3, 500 businesses from across all the sectors participated in the survey.
The Minister highlighted that majority of the businesses surveyed were micro and small enterprises.
Koya says 71 percent of the respondents stated that their business was stable and thriving before the pandemic.
These businesses were able to set aside cash reserves adding that this was also a reflection of their ten-year unprecedented economic growth.
Koya says following the pandemic the entire business landscape changed.
“The results reveal that the main impacts felt have been depletion in cash flows to adequately manage the business operations or service their debt, inability to fully operate all the functions of the business just because of reduced hours of operations and canceled or delayed capital works, difficulty in managing or retaining employees and customers and concern in supply and cost in raw materials.”
He adds over one thousand businesses have indicated a substantial loss in revenue.
“1200 businesses stated that they expect a decrease in their revenue by 75 percent and should the impact of COVID-19 continue for up to another six months, about 512 are expecting bankruptcy.”
Koya stressed these are preliminary findings and a final report will be out by next month.
Credit: FBC
Date: 29/5/2020
