GAIN Working Paper Series 24 - National governments support measures for small business during the COVID-19 pandemic

This report presents the findings from an assessment of 163 policy measures by national governments to support micro, small, and medium-sized enterprises (MSMEs) in nine low- and middle-income countries (LMICs) between March 2020 and March 2021 during the COVID-19 pandemic. Around the world MSMEs play a critical role within food systems, particularly for low-income consumers in urban and rural areas in LMICs. However, COVID-19 has affected these food systems profoundly, hitting the most vulnerable people the hardest. This reality emphasises the importance of support measures targeted at enabling food system MSMEs to maintain their operations and build resilience during the pandemic. 

The mapping shows that support policies predominantly targeted the financial constraints of enterprises (e.g., high debt burdens, cash flow disruptions, demand-side shocks, risk of bankruptcy, and the consequential risk of layoff of workers). Where support measures specifically target the food market, access to affordable inputs was the principal focus, especially through financial instruments (e.g., subsidies or low-interest loans). Non-financial measures, such as providing technical assistance and training (with or without financial support), were less common. 

Most policy measures intended to reach food system MSMEs were only available to legally registered companies, thus particularly excluding smaller and women-owned firms. Most of the support found was time limited and lacked investment in capacities and infrastructure. Support measures aiming to increase MSME resilience would ideally also consider how incentives can be created to encourage changes that benefit food and nutrition security.