Global economy

Bankruptcy rates fall during COVID-19

23/08/2021 PNG

Countries such as France, Germany, Italy suspended the obligation to file for bankruptcy for part of 2020 as the COVID-19 crisis hit. In recognition of the vital economic role smaller companies play, this allowed entrepreneurs and SMEs survive a massive economic shock as the pandemic unfolded. The result has been lower levels of insolvency 2020 and 2021 compared to 2019.

These temporary government measures prevented a much greater economic crisis and were key in sustaining businesses of all sizes (even though larger and more mature firms were more likely to take advantage of these opportunities and succeed).

Government support has been less effective at reaching self-employed, smaller and younger firms, women, and entrepreneurs from minorities. Looking ahead, policies that foster inclusion and resilience could improve the prospects of recovery measures.

See also: OECD SME and Entrepreneurship Outlook 2021