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Small businesses are first casualties of COVID-19 outbreak

March 24, 2020

Sagar Ghimire, My Republica, March 24, 2020 

KATHMANDU: As the country braces for a partial lockdown in the wake of a possible risk of COVID-19 outbreak, many small businesses in the capital city have already downed their shutters.

Owners of these small businesses say that they are already facing financial crunch to pay rent and salary to their employees, meet operating cost and repay their debt. They also say that the next challenge for them is to stay afloat.

Bodhi Books and Bakes, a cafe in Kathmandu, is one among thousands of small businesses which has temporarily shut operation due to the crisis created by the COVID-19 pandemic.

“We took a proactive step to shut down our cafe fearing the risk of infection,” said Jagannath Lamichhane of Bodhi Books and Bakes. “But we are worried about paying the rent to the landlord and salary to our staffers if this situation persists,” he said, urging the government to come up with a relief package to help them lower their expenditures like rent so that they do not have to lay off staffers.

“The government should not listen to big corporate houses, but consider the financial problems faced by small businesses that offer employment opportunities to thousands of people,” he added.

While many small businesses like retail shops, party palaces and restaurants have shut down, the government has yet to come up with any relief package for them.

With the closure of these small businesses, thousands of workers and employees face the risk of losing their employment.

Officials at the Ministry of Finance (MoF) say that they have been studying the economic impact of COVID-19. Except a policy by the Nepal Rastra Bank (NRB) about flexibility in rescheduling and restructuring of loans for certain businesses, particularly the tourism sector, the government has not announced financial and economic relief package for businesses which are likely to face the economic burden due to the crisis.

The Federation of Nepalese Chambers of Commerce and Industry (FNCCI) has sought a a three-month extension of the deadline for paying taxes and repayment of loan for businesses. However, the government has not taken any decision about the deferral of the tax payment and loan repayment deadline.

Although discussions about the economic impacts of the outbreak has centered on rescue and aid to big corporations, there has been little concern about the acute impacts being felt by small-scale businesses, say the owners. They complained that problems to access bank credit and lack of adequate cash reserve have made it difficult for the small businesses to protect themselves from the impact.

“As the supply chain has been disturbed, we have been compelled to stop receiving online orders. We have asked our staff not to come to office. I am not sure how long this will go, but it will definitely have an impact on our businesses as well as the livelihood of our staffers,” said Bishnu Puri, the CEO of kapadaa.com, an online fashion retailer.

Source: https://myrepublica.nagariknetwork.com/news/small-businesses-are-first-casualties-of-covid-19-outbreak/