The IDB together with the Brazilian Development Association (ABDE) published a document that analyzes the impact of the COVID-19 pandemic on Brazilian micro, small and medium-sized enterprises (MSMEs) and the role of the National Development System (SNF) in the implementation of measures aimed at increasing the resilience and recovery of the segment. The study maintains that the economic crisis derived from the COVID-19 pandemic affected Brazilian MSMEs in an even more delicate situation than is usually recognized.

This document has a double objective: (i) analyze how the current bank financing structure for the MSMEs segment can impact the productivity and resilience of this segment in the face of crises, such as that derived from COVID-19, weakening the country’s socioeconomic development; and (ii) discusses the role of the SNF in supporting the segment, considering the need to provide liquidity to ensure the survival of the companies in the short term, investment conditions that allow the adequacy of the business of the desirable economic recovery and improvement of the general conditions for the adequacy of the financial services offered.

The document is structured in two chapters composed of two sections each. A first chapter, in which the characteristics of MSMEs are examined, as well as the bank financing structure for the segment in Brazil, with emphasis on the challenges to obtain productivity gains and resilience to periods of crisis. The first section of the first chapter discusses the importance of MSMEs for society and the national economy, with implications for the employment and income generation, as well as for the resilience and productivity capacity of the economy as a whole. The second section of the first chapter presents the recent financing scenario for MSMEs in Brazil, allowing an analysis of the obstacles that still exist in terms of the supply of resources, access conditions and adaptation.

The second chapter assesses the impact of the COVID-19 pandemic on Brazilian MSMEs and the government measures adopted to support the segment, with emphasis on the actions promoted within the scope of the SNF. The first section explores the impacts of the COVID-19 pandemic crisis in the MSMEs segment, comparing different surveys carried out, with sectoral and regional cuts. The last section analyzes the role of SNF institutions in mitigating the effects of the crisis and promoting conditions to increase the productivity and resilience of MSMEs, in order to support economic recovery in the face of current challenges.