83% of small and medium businesses in Latin America suffer with the pandemic

A study by Visa and AMI shows that SMB in the region use digital banking only for simpler services

A small gift shop store front in El Salvador. Photo: Shutterstock
  • Employees’ payroll appears as the biggest concern for small entrepreneurs;
  • 60% of them do not access credit or loans (including from friends or family, excluding credit cards).

A survey commissioned by Visa and carried out by Americas Market Intelligence (AMI) shows that 83% of Latin American small and medium-sized enterprises (SMEs) suffered a reduction in their activities during the pandemic. According to the credit card banner, the remaining 17% are mostly suppliers of essential services, such as markets, pharmacies and gas stations.

The results also show that sales were significantly reduced to 40% of the companies interviewed, while 30% face a lack of raw materials, cancellation of contracts and loss of customers.

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Employees’ payroll appears as the biggest concern for entrepreneurs, followed by rent payments, furniture loans and expenses with electricity, water and telephone bills. With that, companies would like to be able to count on the support of banks to face and overcome this crisis.

When asked about the use of services offered by banks, 87% say they use the Internet Banking and / or the mobile application of their financial institution, compared to 78% in 2018, registered by the Visa SME Reference Study that year. And, with regard to the usability of these technologies, 85% of SMEs report using the basic functions of consultations, transfers and payments. Only 15% carry out more advanced transactions, such as card cancellation, credit applications, account opening and customer service.

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60% of SMEs

do not access credit or loans (including from friends or family, excluding credit cards and other simpler financing); in 2018, it was 86%.

Regarding the use of social networks, 97% use them to communicate with their customers; 56% of them believe that banks could also help them to have tools to sell online and / or via social networks / messaging applications.

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“SMEs in Latin America are already making good use of banks’ digital channels and social networks to communicate with customers. Therefore, we have an opportunity to help them make business operations by these means increasingly secure, practical. and convenient, and, consequently, contribute to the conversion into a greater number of sales and transactions in the online world “, says JP Cuevas, Head of Visa Business Solutions for Latin America and the Caribbean.

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