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Credit and Finance for MSMEs: Large technology startups around the world have rolled out measures to protect small businesses and micro-entrepreneurs or gig workers working with them whose income and livelihood have been hammered by the Coronavirus outbreak. From cab booking, on-demand professional services to online deliveries, startups globally have been stepping up to ensure minimal impact of Covid-19, which emanated from China’s Wuhan, that infected over 13.62 lakh people and caused over 76,000 deaths.
UberEats, for instance, has waived off sign-up fees for restaurants joining the platform in the UK and reduced the service fee for its existing restaurant partners in Hong Kong, according to a report by the Ola Mobility Institute – the policy research wing of Ola. UberEats, whose India operations were acquired by Zomato recently, is also giving restaurants the option to receive daily payments instead of weekly in order to maintain cash flow and pay suppliers and staff.
Similarly, Singapore-based global cab-booking service Grab will offer its drivers in Malaysia with vouchers to help with their daily household expenses while in Singapore, the company is providing driver and delivery-partners “one-off income support of $500-1,000, and reimbursement of the rental fee of drivers renting their vehicles from Grab,” the report titled Leveraging and Protecting the Gig Economy against Covid-19 said. Ola too is supporting its drivers through a Rs 20-crore fund called ‘Drive the Driver Fund’, to support auto-rickshaw, cab, kaali-peeli and taxi drivers apart from providing Rs 1,200 per week for three weeks period to eligible drivers under ‘Ola Sahyog’ programme to help them with their household expenses set off against the future income of these drivers on the Ola platform.
“Under these extraordinary circumstances, gig workers and platform companies are adapting quickly and leveraging their workforce to ensure transportation services, delivery of essential commodities and medicines are available to the most vulnerable populations,” Carson Dalton, Senior Director, Ola Mobility Institute said in a statement.
China’s cab-booking service DiDi coordinated with more than 3,000 leasing partners in the country to expand a lease extension plan for its ride-hailing drivers even as it launched two new errand running services to tide over losses incurred from its ride-hailing services. In India, the hyperlocal services startup Urban (earlier known as UrbanClap) has given interest-free business loans and delayed payback periods to protect small businesses and self-employed working with them.
Beyond these startups, the governments in multiple countries have come up with lending and financial support to support businesses particularly MSMEs. For instance, China has expanded “re-lending and rediscounting facilities by $42 billion to support MSMEs at low-interest rates,” the report noted. The government’s support is also extended in terms of delay of loan payments, tolerance for higher non-performing loans by epidemic-hit sectors and SMEs, and reduction of VAT for small businesses.
France, on the other hand, is giving commercial loans and credit lines worth €300 billion ($327 billion) for MSMEs and $ 4.3-billion package for startups. MSMEs affected by the Coronavirus in Australia have got relief from the government’s decision of deferring loan repayments and offering loan guarantees to support them with immediate cash flow needs. Likewise, Saudi Arabia has launched a $13.3 billion package to support MSMEs particularly by giving funds to banks to allow them to defer payments on existing loans and increase lending to businesses.