QUESTION OF: Measures to increase access of small-scale enterprises to financial services, including affordable credits following the COVID-19 crisis

SUBMITTED BY: Mozambique

CO-SUBMITTERS:Belarus, Cambodia, Botswana, China, Jamaica, Mali, Nicaragua, Honduras, Slovakia, Turkey, Ukraine, Yemen.



Acknowledging that small-sized enterprises (SSEs) are currently providing 90% of businesses and 70% of employment rate in the world and creates at least 43% of international income every year,

States that during the COVID-19 period global unemployment rates increased to 19% and 50% of low-income individuals are having trouble paying their bills,

Reminds all member nations that Less Economically Developed Countries (LEDCs) lost almost 25% of yearly income because of COVID-19, 

Further states that 40% of SSEs employ fewer workers, 33.3% have gone out of business and 20% of all SSEs are partially closed,

Further reminds all Member States that the estimated end of COVID-19 in LEDCs is the first quarter of 2022 and for More Economically Developed Countries (MEDCs) it is the end of 2021,

  1. Strongly recommends the establishment of a supervisory committee, the ‘Microcredit Facilitation Committee (MCFC)’, at the international level which works with national governments of States; its main focus is establishing Microcredit Finance Institutions (MFIs) at the lowest tier of the economy, through aid from Non-governmental organization, to reach an unbanked part of the country, through the following: 
    1. At a national level:  
      1. To create a wing of the government with the same name to conduct operations specific to the country 
      2. To license microfinances to Non-governmental organizations with a legal registration to a registry and a provision of regulatory laws to be abided by in compliance with local law 
      3. To supervise MFIs for compliance with licensing requirements by setting up an online portal (ex – where customers (SSE Owners) can lodge complaints for non-compliance  
    2. At the international level:  
      1. To establish the portal mentioned in a) ii) with servers specifically for countries (handed over to national governments) 
      2. To create regulatory framework inclusive of rules governing MFI formation and operation, consumer protection, fraud prevention, the establishment of credit information services, secured transactions, interest rate limits 
    3. In the event a State already has a governing body for a similar purpose, they are suggested to implement these policies as part of their campaign; 
  2. Requests the Member States to increase information sharing and transparency between governance, SSE’s, and stakeholders through:
    1. continuing to attend the conferences such as the United Nations Conference on Trade and Development (UNCTAD) and International Labour Conference to discuss and report the efficacy of government support to SSEs around the world
    2. hosting national online conferences and televised programs where SSE are able to voice their personal experiences with a business concerning crisis and expand their networking by access to other SSE’s and ensuring:
      1. meetings are televised or hosted on verified radio stations
      2. SSE’s are invited as guest speakers and are able to communicate with the organizers of the event
      3. creation of hotlines where SSEs are able to contact the organizers prior to the event
      4. assistance from the ILO as well as the International Council for Small Businesses (ICSM)
    3. creating support packages for formally registered SSE’s with the aid of the World Bank, ILO, and United Nations Industrial Development Organization (UNIDO), as well as Member States’ national sector of government responsible for fair work and employment to include: 
      1. strategies for increasing business efficiency, product development, and maximizing technological productivity
      2. suggestions for increasing product availability and the alternate ways it could be distributed
      3. connections to contacts of private sector companies who work with SSEs for development and funding as well as business advice hotlines
      4. employment of SSE focused on advertising companies to take over local communities and promote the various SSE existing in that community
      5. collaboration with the International Labor Organization (ILO), International Monetary Fund (IMF), and Organization for Economic Cooperation and Development (OECD) to identify highest risk points and conduct an analysis on SSE’s post-COVID and address those issues with the proposed events in subclause b
    4. suggesting fellow member-states to ratify trade agreements, or create, such as the EU-Japan Economic Partnership Agreement (EPA) and the Comprehensive and Progressive Tran-Pacific Partnership (CPTPP) and the publication of frameworks that bring forth issues of SSEs and provide them with their deserved opportunities by:
      1. allowing importers (or business who procured the imported goods) access to lower-cost goods allowing for a reduced cost for business operations in SSEs in each respective member-state
      2. giving SSEs resources and the expertise/knowledge to navigate complex trade rules, and thus effectively reap the benefits of trade agreements;
  3. Calls upon the Member States to encourage the formalization of the SSE workforce of their economy by:
    1. establishing an accessible registration platform for informal businesses where they can enroll their firms by stating:
      1. the location of operations, number of employees, most recent quarterly revenue and costs 
      2. personal financial information of employees such as number of people in household living income, area of residence, health disabilities, estimated expenditures on necessities, such as but not limited to, food, shelter, and healthcare
    2. creating taxation and financial aid plans for newly registered and expanding small enterprises by:
      1. calculating the average survival cost in the region per person times the number of employees in the SSE as non-taxable profit
      2. no taxes in the first year of registration within the government platform
      3. a tax break for the time the business does not receive any profit
      4. tax on profit after average cost calculation should not exceed 5% if the enterprise is by definition an SSE
      5. businesses who register are eligible for government loans and investments
    3. offering microloans or microcredits to SSEs with aid from finance organizations, such as but not limited to the International Monetary Fund (IMF) and the International Finance Corporation (IFC);
  4. Suggests improving or creating financial support networks, especially during and following time of crisis, for SSEs and newly registered SSEs, as outlined in clause 2, by:
    1. providing a government-based system of insurance for SSE bankruptcy by ensuring:
      1. registration of businesses into the system where they are able to develop a contract with frequency and amount of payments
      2. in the case of bankruptcy, businesses are able to gain insurance easily and in a timely manner
      3. nations with the lack of funding would be assisted by partnership with the IMF or volunteer MEDCs
      4. consequences for businesses who are found guilty of insurance fraud
    2. increasing access and the provision of low-interest loans and credits through the creation of an SSE registration program, to be affiliated with the UN and will allow for:
      1. SSEs to submit a claim for funding and monetary aid
      2. connection to potential investors not affiliated with the UN
      3. inclusion of paycheck protection programs to help businesses keep workers employed, as well as greater access to loan forgiveness in the situation that SSEs are not able to pay back the loans for various reasons
      4. a general increase in loan contract flexibility
      5. more effective liquidity support measures in the form of the aforementioned credits
    3. setting up and allocating stimulus checks to registered SSE owners to restart businesses during crisis;
  5. Calls for the establishment of additional aid for SSE besides financial support following the COVID-19 through:
    1. providing infrastructure and offices where SSEs could send applications for space to local authority and will be:
      1. built by contracting local construction SSEs to clear out or build functioning offices
      2. maintained by the local or regional government who will approve leases for SSEs
      3. offered currently unused infrastructure such as buildings or office spaces that are unused due to COVID-19
    2. asking all Member States (who are capable of) to create an eCommerce network which will have sub-networks for local (which includes local cafe shops, dining places, groceries, bakeries, etc.) SSEs:
      1. which will revive the economy and minimize the effects of lockdown by letting people order from their local shops
      2. which will reduce negative competition between chain markets and local shops, for deliveries that are countrywide, shipping company/companies that are decided by the government will be responsible, or that are local/speed deliveries will be done by local motor couriers which will reduce the unemployment rate and speed up the process of delivery
      3. accessibility to the network service will be provided by the government to SSEs to connect them to the network system
      4. any information related to sales will be entered into the system, to prevent any malpractice and misdeliveries
      5. for the countries which can’t provide internet services to most of the population will be exempted from this clause because citizens already have to buy from their local shops;
  6. Encourages the cooperation with UN agencies such as the World Health Organization (WHO) in LEDCs or private production companies to provide medical relief related to a health crisis, such as large disease outbreaks, by delivering simple equipment such as, but not limited to, masks, gloves, hand sanitizer, and plastic shields through:
    1. collaborating with local and regional governance to identify small businesses who operate with physical contacts to customers, such as restaurants and stores
    2. developing contracts with production companies to deliver their products and incentivizing them through tax cuts;
  7. Strongly advises central and local governments of Member States to initiate and popularize mobile/telebanking as an official means of economic transactions within nations, in rural and urban areas alike through:
      1. incentivizing mobile phone companies to acquire e-banking license which enables users to store money digitally by the implementation of e-transaction fees
      2. educating populations that are new to mobile banking about the concept of e-banking and how it should be used through free to attend seminars, workshops, advertisements, and webinars
      3. registering SSE owners to digital transaction accounts as an alternative to storage and circulation of cash within the industry;
  8. Introduces the ‘United Nations Organization for Financial Information’ (UNOFI) to act as a part of the United Nations Department of Global Communications (UNDGC) and in cooperation with United Nations Information Centres in order to provide the following services:
    1. establishing offices in all UN member states to provide relevant information therein about starting Small Scale Enterprises (SSEs), how to run SSEs efficiently, strategies for SSEs to deal with an economic downturn, and other such knowledge deemed necessary to ensure SSEs become more resilient and sustainable
    2. disseminating the aforementioned information with the help of national and local  governments through means such as but not limited to:
      1. well-publicized workshops and seminars organized for local businesses owners held in community centers free of charge
      2. providing pamphlets and online resources to individual business when they are created and during regular government inspections to existing businesses
      3. media campaigns and cooperation with major financial and media institutions.