Data collected from 250 small and medium enterprises
KUWAIT CITY, March 29: Data collected from about 250 small and medium enterprises (SMEs) show at least 60% of them will be unable to pay the monthly expenses starting next May, reports Al- Qabas daily.
The study submitted to the Cabinet show the consequences of the spread of the Coronavirus on SMEs. The study says if only 50% of projects falter, about 100,000 workers will be rendered jobless, and this figure does not include the national workforce.
The study shows the number of those registered under Chapter Five is 16,000 employers and the average number of employees in some projects varies between 10 employees and 20 employees in each venture. The sources noted 24,000 Kuwaitis registered in Chapter Three at the Public Institution for Social Securities (PIFSS) face the risk of being laid off, as the percentage of SMEs that employ Kuwaitis is 77, with an average of 3 in each project, in addition to 8,000 Kuwaitis registered under Chapter Five, as ‘Entrepreneurs’.
It is worth mentioning that the study is prepared by a work team including Ayman Al-Ruwaihi, Bader Al-Fawzan, Abdullah Al-Jouan and Abdulaziz Al- Loughani with the participation of the Kuwait SMEs Association, the Reconnaissance Center for Research and Studies and Tasaweeq Marketing Consulting Firm The following mechanisms have been suggested to offset the situation. Banks finance and manage the fund to avoid government bureaucracy; the good loan is based on the project’s fixed monthly expenses for a period of 6 months; a grace period of one year and a repayment period of no more than 3 years and issue urgent decisions regarding fee exemptions.
A “good loan” to support companies with a grace period of payment of at least one year; Seek to reduce rents; rescheduling loans granted by financing agencies to those who have to bear the burden; exemption SMEs from government fees; adoption a bankruptcy law to protect company owners from all types of creditors and freezing judicial claims (labor claims bills checks) for a period of one year. Support terms include, the project owner must be registered in Chapter Five of the PIFSS; the owner of the project must be a manager in the founding contract (except for the individual institutions); the project must have been in operation for 3 months minimum; the project owner must have an active file in the ministry of Social Affairs for no less than 3 months; no layoffs for citizens working for the company and the loan shall be in the name of the company and the state has a priority in collecting its funds from all creditors.