A majority of MSMEs in developing countries remain informal, operating without access to several benefits and programmes supported by Government during the emergency response to the COVID-19 outbreak. It is estimated that in some countries, up to 95 per cent of MSMEs are informal, most of which are led by the working poor, women, youth and other marginalized and vulnerable groups. They lack access to financial resources and international markets, thus limiting their roles in the economic resurgence post-COVID-19. Being most at risk of falling into poverty and being left further behind, it is imperative that MSMEs are included in an inclusive economic resurgence post-COVID-19.
Responding to a request from the Government of El Salvador, the project allowed for the creation of an online single window for MSMEs to register and access digital services. Launched in June 2020, using a platform that can be configured for different countries, Cuentamype.org allows entrepreneurs to register their companies online - eliminating the previous cumbersome task of having to queue at multiple government offices. Its aim is to encourage the formalization of informal businesses. Since its creation, some 12,000 MSMEs have been formalized.
As the Covid-19 pandemic prolonged, the government designated Cuenta MYPE as the official registration portal to access a $600 million Covid rescue package, aimed to assist small businesses affected by lockdowns. Fifty-six per cent of those who registered through the new portal were women, reflecting how online portals make government services more accessible to vulnerable groups. Cuenta MYPE became the platform from which the government could continue to serve the population. Between June and July 2020, the number of users to the platform increased two and a half times. It is expected that by allowing information to be exchanged electronically between different administrations, significant improvements and simplifications in the delivery of government services will be made.
The SME surge project is now helping the Municipality of Santa Ana in El Salvador to develop an online accounting and tax system which will be launched later this year. Businesses in the municipality that register through Cuenta MYPE will be automatically registered with up to 12 ministries, agencies, tax departments and social security funds, both at national and municipal levels. By entering their accounts into the system, it will automatically generate the legally required 6 monthly and 11 annual filings for users to submit electronically. Entrepreneurs will save significant time and money, find it easier to file their taxes and social security on time, and make fewer errors. A common digital platform also means company data can be cross-linked with fiscal and labour data, allowing the economic and social impact of entrepreneurship policies to be measured, which in turn will help support the government’s growth and development objectives.
In the next phase of the project, similar online communication system between the Small Business Administration and small businesses will be set up in three additional countries. Through these platforms, MSMEs from beneficiary countries will be able to keep their personal data and administrative documents safely online, comply with legal obligations linked to formalization (registration with mandatory registers), apply for credit, insurance and technical assistance, and report on their need for assistance from the government in the context of the Covid-19 (subsidies).
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