The impact of Covid-19 pandemic on MSMEs

Abstract

The Covid-19 pandemic that began to spread at the beginning of 2020 has greatly affected the economy, including firms’ financial conditions. In this respect, micro, small, and medium enterprises (MSMEs) likely experience greater negative effects of the Covid-19 pandemic than large firms due to their limited resources. Hence, this study aims to analyze the impact of Covid-19 on MSMEs’ performance in former Pekalongan Residency, as measured by the sales turnover, labor, and business cash flow resilience. The analysis is based on the survey results of 100 MSMEs in the Pekalongan former regency. The findings suggest that MSMEs have suffered a sales turnover decrease of 1.2573 percent. Further, the mapping analysis using the Cartesian diagram demonstrates that the retail and food and beverage provision sectors exhibit the greatest labor decrease and average business cash flow resilience of 1.5 – 2 months. Meanwhile, based on firm size, micro firms have average cash resilience of 1.5 – 2 months.