Colombian bill expected to support small and medium-sized businesses

Colombia’s current legislative session will end today despite the presence of pending bills on the Senate’s docket. The assembly’s priority

Colombian Senate in 2016

Photo: Leonardo Munoz/EPA

Colombia’s current legislative session will end today despite the presence of pending bills on the Senate’s docket.

The assembly’s priority will be to reach a decision on legislation that sets a time limit on invoices to small and medium-sized enterprises (SMEs). The legislation is intended to provide SMEs with increased cash flow, although critics claim the bill constrains freedom of enterprise, private initiative, supply chain productivity and purchasing power. Boosted cash flow could also stimulate excessive inflation, as large corporations currently owe more than $15 billion in debt to SMEs.

Colombia has enforced the world’s longest pandemic lockdown, which has extended from late March to at least early July. Prolonged economic stagnation—coupled with the global pandemic-induced oil devaluation—has drastically affected SMEs, which constitute 80% of employment and 40% of GDP. Congressman Mauricio Toro has warned that the sector is at extremely high risk of bankruptcy, and its collapse could cause unemployment to skyrocket beyond the current rate of 19.8%.

Expect the SME bill to be pass as a presidential sanction in the last step of the legislative process.

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