According to the DANE, the National Administrative Department of Statistics, an entity for which a micro-business is an economic unit that has a maximum of nine people employed and that develops a productive activity of goods or services. During the pandemic, 509,370 micro-businesses were closed in Colombia.
These went from 5.8 million between January and October 2019 to 5.3 million in January and October 2020. Of the total number of micro-businesses, in that period 26.9% are in Trade and repair of motor vehicles and motorcycles activities, 21.9% are engaged in Agriculture, livestock, hunting, forestry and fishing and 9.9% in Manufacturing Industry (include: collection, treatment and disposal of waste, recovery of materials).
Now going into more detail on these numbers by city, the following losses were registered, for Bogota there were 647,819 micro-businesses and Cali 245,609 micro-businesses. However, in Medellin the number of new micro-businesses grew 5.3%, more than 17,600 new micro-businesses.
It is important to highlight that 26.9% of the micro-businesses are located in a dwelling, that is, 1.4 million. On the other hand, a total of 1.0 million economic units (19.5% of the total) worked door-to-door or at home. In the first 10 months of 2020, micro-businesses employed 7.2 million people, 13.1% less than in the same period of the previous year, when 8.3 million people were employed.
Last October, unemployment in Colombia reached 20%, which means that more than 4.5 million people were unemployed due to the deep economic crisis caused by the coronavirus. Although many sectors have been affected by the situation, restaurants, stores, bars, casinos and hairdressers have borne the brunt, at least until August.
In percentages, commerce (35.5%), services (45%), industry (12.3%) and construction (4.7%) represented the highest records.
Most of the companies being liquidated are microenterprises (96%) engaged in commerce (35%), accommodation and food services (14%), and manufacturing industries (10%). These organizations are less sustainable, less adaptable to competition, and less responsive to market changes.
At the end of September, the Superintendence of Companies published a report on insolvency statistics in the country, which showed that during the first nine months of the year it received 852 insolvency applications, of which 624 occurred during April 1 and September 24, that is, the highest peak of the pandemic in the country.
The same report explained that during the first semester there were a total of 3,055 insolvency processes, of which 2,449 are reorganization processes representing $43.2 billion in assets and a total of 126,147 workers. The total number of processes is divided into 210 companies in agriculture, 718 in commerce, 351 in construction, 578 in manufacturing, 57 in mining, 819 in services and 532 natural persons.
"Insolvency has an incubation period between six and 18 months. If you take that into account, the increases in applications will happen all this year and in 2021. We are already seeing that. We were coming from 70 applications per month on average during the first quarter. In the second quarter they held steady. In July we started to see 120 applications and it has not gone down. We believe that this will surely continue during the third quarter," said a spokesperson for the Superintendency.
Casinos and Gambling Rooms Localized Mode
According to Coljuegos' last accountability report published in October 2020, the localized sector had a 72% decrease in its collection in comparison between 2019 and 2020, going from $382,182 million Colombian pesos (103,736,818 USD) to $78,734 million Colombian pesos (USD 21,371,008)
That is to say that the sector went from representing 57% of the total collection of games of chance to 34% of the total collection of the industry.
Regarding the number of localized contracts, in an analysis of the numbers presented by the entity from 2018 to October 29, 2020, there was a decrease of only one contract. That is to say, for 2018 there were 363 localized contracts, in 2019 there were 360 while for 2020 at the cut-off date there were 362 contracts.
These 362 contracts represent a total of 2,737 establishments, 40 more than in 2019 but with 7% a smaller number of slot machines. That is to say, from 87,087 machines that there were for 2019, they were reduced by 5,921 for 2020, with a total of 81,166. This is due to the restrictions imposed by the government for the economic reopening strategies with the maximum capacity levels, forcing operators to readjust their contracts in order to survive the times of crisis caused by COVID-19.
For 2021, a decrease in machines is expected for the first half of the year as a result of the stoppages and the tight situation of the operators.
Over 80% of the casinos in Colombia are family businesses with machines costing between US$15,000 and US$30,000, with fees paid in dollars, and those prices have skyrocketed due to the exchange rate hike, not to mention the weekend closures due to selective smart isolation
