Micro, small and medium enterprises (MSMEs), a sector that concentrates 2.2 million jobs in the Dominican Republic, moved At the end of last year, RD$393,551 million in credits from the banking sector, equivalent to a third of the total financing of the national banking system.
The revelation was made by the general manager of the Banco de Reservas, Samuel Pereyra, in the first of four meetings that the Bank will hold. The institution discussed various productive sectors in the country, and on this occasion was dedicated to analyzing the contributions of this Bank to MSMEs.
Of the total credits that moved in 2021, 55.5% corresponded to to microenterprises; 25% to small and 19.5% to medium-sized companies, he specified. Pereyra when analyzing the panorama of MSMEs in the Dominican Republic and the recovery of the sector after the Covid-19 pandemic.
The majority of Dominican MSMEs – bye Pereyra- operate in urban areas, of which 83% operate in fixed premises and more than 51% of these micro-enterprises are led by women.
Compared to the 2.2 million jobs provided by this sector, formal companies employed 618,672 people in 2020, which represents about 14% of the employed population. “It should be noted that small formal companies were the largest employer with 57.3%”, he added. Pereyra.
“In terms of sales, -he added- they represent an average of 32 of every 100 pesos of the total sales of the Dominican economy, with the small business being the one with the greatest relative contribution, representing close to 60 %”.
Contribution to the treasury
The general manager of Banreservas stressed that with respect to “contributions to the treasury, 13.8% of the total effective collection of the General Directorate of Internal Taxes (DGII) comes from them; 17.6% of the income tax (ISR) of legal persons, 91.2% of the ISR of natural persons, 12% of the ISR of employees and 22.1% of the collection of the ITBIS”.
During the meeting held at the Club del Banco located in Santo Domingo and broadcast on Instagram and Youtube, the Minister of Industry, Commerce and MSMEs, Ito Bisonó, also spoke; the general director of Promipymes, Porfirio Peralta; and the executive president of the Fundación Reservas, María Isabel Pérez.
The talks initiated by Banreservas constitute a frank and direct channel of communication with the wealth-generating sectors of the country, which are a fundamental part of the creation of jobs and the social development of the country. Pereyra.
Recovery
Analyzing the recovery of the sector after Covid, Pereyra explained: “MSMEs, representing 98.5% of Dominican businesses, were severely affected by the pandemic. It is a reality that many businesses had to close their operations and others reduce their staff”.
By pointing out that the health crisis business resilience and accelerated his digital transformation, he emphasized that thanks to the support of the Government and the financial sector, many of these vicissitudes have already been overcome.
Pereyra remembered that, throughout the pandemic, the monetary and government authorities adopted a series of measures to soften the impact of the health crisis and reduce its economic repercussions.
Among the measures implemented, he cited: The creation of support programs for Dominican workers such as the Solidarity Assistance Fund for Employees (FASE), Stay at home and Pa´ti.
Other measures of great importance that were adopted were those intended to reduce the impact of inflation; and reverse the increase in the exchange rate; in addition to the fact that the increase in remittances, exports and the recovery of tourism helped strengthen the peso against the dollar.
The general manager of Banreservas maintained that this entity, as the leader The leader of the national financial system, during and after the pandemic, has reinforced its role as a driver of the economy, with the promotion of initiatives that contribute to the development of small and medium-sized companies, with the purpose to strengthen its working capital and streamline its operations.