Improvements in road infrastructure reduce costs to MSMEs

Benefiting companies would reduce their travel time by up to 20.5%.

Micro, small and medium-sized enterprises (MSMEs) face multiple obstacles throughout their business life, including access to credit and technologies to help them grow. They generate 60% of jobs and represent 25% of the gross domestic product (GDP) in the Latin American and Caribbean region, according to a report by the Inter-American Development Bank (IDB).

The document states that companies in the transportation sector, 99% of which are MSMEs, represent 5% of all companies in the region. They face limitations due to the poor quality of infrastructure and logistics costs.

For these businesses, logistics costs can reach more than 40% of local sales, 2 to 3 times higher in large companies. On the other hand, transportation can represent up to 23% of the final price, as in the case of Costa Rica. This is due, among other things, to the low quality of road infrastructure, according to the IDB.

Accessibility

The international financial organization points out that transportation logistics is relevant in the time invested in the mobilization of goods, which is an important component for territorial economic development. The impact of roads

The interventions that correspond to the rural roads program, which includes the intervention of 274.39 kilometers of roads throughout the national territory, could help reduce transit time and impact on operating costs.

The design of a transportation network affects its performance, as it establishes the infrastructure within which operational transportation decisions are made. A well-designed network allows for better strategies at a lower cost.

Benefits

In the Dominican Republic there are almost 1.5 million micro, small and medium-sized enterprises, which represent 98% of the total productive fabric. In terms of size, 92% correspond to micro companies and 7% to small companies, according to the Ministry of Industry, Commerce and Mipymes (MICM).

The report details that comparing travel times from small and medium-sized companies to logistics hubs, it was found that on average, the potential beneficiary companies would reduce their travel time by up to 20.5%. These potential improvements in travel times would range between 43% and 6% of the total time to reach a destination.

There would also be a reduction in travel times to airports in a large proportion of the national territory and of the SMEs analyzed, these reductions would be more marked by road works in the western part of the country. The reductions would be below 15 minutes of travel time.

Source: Eldinero.com.do

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Dominican Republic Live Editor

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