Despite recovery, pandemic still haunts Brazil’s small businesses

Brazil’s smallest businesses have been the biggest losers after almost 16 months of the Covid-19 pandemic. While the country’s micro, small and medium-sized enterprises (MSMEs) are now beginning to show some signs of recovery, these firms still face huge challenges and bottlenecks, linked to vaccination rates, access to credit, and financial organization.

According to a survey from the Brazilian Small Business Support Service (Sebrae), 79 percent of Brazil’s MSMEs are still reporting revenue losses. Some 67 percent say their income is not enough to cover their overheads. 

Yet, there is positive news with regard to employment. The same Sebrae study showed that May was the 11th consecutive month in which micro and small businesses posted positive job creation results. In the first five months of 2021, Brazil’s smallest firms saw 848,419 new positions, three times that seen by the country’s medium and large companies over the same period. 

“Even with the strong impacts on the drop in sales of small businesses caused by the coronavirus pandemic, this segment has been responsible for sustaining the level of employment in Brazil,” notes Sebrae president Carlos Melles, underlining that small businesses are the biggest employers...