J.1.5_TMS Business Resilience Survey #2 - ENG.pdf

6/11/2020 Intro

1/1

Given the scale and scope of the global crisis caused by COVID-19, rapid and proactive adaptations are required. A second survey on enterprise resilience to the COVID-19 crisis was launched in May 2020 to measure the adoption of biosecurity measures by enterprises, assess how enterprises are adapting to the crisis, and to collect evidence on the contribution of different relief measures to enterprise recovery. This initiative brought together the following institutions with the aim of generating evidence to support management decision-making and coordinated responses between the public and private sectors.

This document is made possible by the support of the people of the United States through the United States Agency for International Development (USAID).

The contents of this document do not necessarily reflect the views of USAID or the United States Government.

BUSINESS RESILIENCE ANALYSIS COVID-19 SECOND SURVEY MAY 2020

6/11/2020 Sample

Number of survey responses

Department

Responses

Atlántida Choluteca Colón Comayagua Copan Cortes El Paraíso Francisco Morazán Gracias A Dios Intibucá Islas De La Bahía La Paz Lempira Ocotepeque Olancho Santa Barbará Valle Yoro

Total 1330

Enterprise Size Responses

Micro Small Medium/Large

Total 1330

Economic activity

Administrative services Agriculture (production) Arts, events and recreation Commerce Construction Energy and gas Financial services Food services Health services Information and communications Lodging Manufacturing industries Professional activities Real estate Transport

Total 1330

Percentage of enterprises that participated in first panel

54% 46% No Yes

Map of survey responses

© 2020 TomTom © 2020 HERE, © 2020 Microsoft Corporation© 2020 TomTom © 2020 HERE, © 2020 Microsoft Corporation

A national rapid mobile survey of businesses was launched 7 to 17 May 2020 to collect data on business resilience to the COVID-19 crisis. The survey questions drew from resilience theory and included indicators from the Honduran Market Systems Diagnostic. The survey team validated responses from 1330 enterprises across 18 departments and in 15 different economic activities.

METHODOLOGY AND CHARACTERISTICS OF THE SAMPLE

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Operational status of enterprises as of May 2020

55.9%

38.0%

6.1%

In Operation

Temporaril…

Permanently Closed

Percentage of enterprises that sold in April 2020

Sold 26.9%

Did not sell 73.1%

Percentage of enterprises that reported suspending or laying off staff in response to COVID-19 crisis

No 35.8%

Yes 64.2%

1. ENTERPRISE OPERATION AND EMPLOYMENT DURING COVID-19 CRISIS

Responses

Responses

Responses

One in four enterprises reported sales in the month of April 2020. More than half of enterprises were still in operation. Most enterprises have suspended or laid off employees to cope with the COVID-19 crisis. So far, most enterprise closures are considered temporary with the expectation of reopening after the COVID-19 crisis. The overall picture is that COVID-19 is a major disruption to enterprises, affecting their ability to operate, make sales and provide employment.

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2. SALES AND OPERATIONAL STATUS BY ECONOMIC ACTIVITY

The percentage of enterprises that reported sales in April 2020 by economic activity

Administrative services 13.98%

Agriculture (production) 48.48%

Arts, events and recreation 13.19%

Commerce 28.92%

Construction 29.63%

Food services 20.35%

Health services 33.33%

Information and communications 45.83%

Lodging 8.85%

Manufacturing industries 42.86%

Professional activities 28.45%

Transport 45.71%

The percentage of enterprises in operation in May 2020 by economic activity

Administrative services

Agriculture (production)

Arts, events and recreation

Commerce

Construction

Food services

Health services

Information and commun…

Lodging

Manufacturing industries

Professional activities

Transport

48.3%

26.3%

54.8%

43.6%

32.7%

50.8%

37.0%

19.0%

71.2%

25.6%

38.7%

35.5%

51.7%

73.7%

45.2%

56.4%

67.3%

49.2%

63.0%

81.0%

28.8%

74.4%

61.3%

64.5%

Closed In Operation

Responses

Responses

There are significant differences across industries whether enterprises reported sales in April 2020 and whether enterprises were in operation. Tourism characteristic enterprises such as lodging, administrative services (including tour operators), food services, arts, events and recreation were significantly less likely to report sales in April 2020 and less likely to remain in operation. This finding raises concerns for the likelihood of recovery of the tourism industry in Honduras and diversification of the Honduran economy.

Sectors such as energy and gas, financial services and real estate are not displayed due to the lower number of responses.

Sectors such as energy and gas, financial services and real estate are not displayed due to the lower number of responses.

6/11/2020 3

3. EFFECTS OF COVID-19 ON ENTERPRISES ACCORDING TO SIZE

Percentage of enterprises still in operation by enterprise size

Medium/Large

Small

Micro

80.7%

62.1%

53.2%

Percentage of enterprises that made sales in April 2020 by enterprise size

Medium/Large

Small

Micro

66.2%

35.1%

22.6%

Responses

Responses

Percentage of enterprises still in operation

55.9%

44.1%

In Opera…

Closed

Percentage of enterprises that made sales in April 2020

26.88%

73.12%

Sold

Did not sell

Smaller enterprises were less likely to sell in April 2020 and more likely to have closed operations. This finding suggests that smaller enterprises are less able to mitigate and adapt to the COVID-19 crisis. Structurally, this finding suggests a threat to the long-term competitive environment as small enterprises are sources of innovation and dynamism that foster a healthy competition.

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Number of employees suspended or laid off by median enterprise emplyoemnt

Percentage of employees suspended or laid off

29.3%

Median number of employees in enterprises

Percentage of employees laid off

4.4%

Percentage of employees suspended

25.0%

Respuestas

4. EFFECTS OF COVID-19 ON EMPLOYMENT

29.3% of employees had been suspended or laid off by May 2020 in Honduras as a result of the COVID-19 crisis. The median enterprise employed approximately eight employees. This means between two and three had been laid off or suspended by enterprise due to the COVID-19 crisis. While, one in four employees had been suspended, one in twenty employees had been laid off permanently. The finding illustrates how the COVID-19 crisis is impacting households and livelihoods by reducing levels of employment.

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5. EFFECTS OF COVID-19 ON EMPLOYMENT BY ECONOMIC ACTIVITY

Percentage of employees suspended or laid off due to crisis by economic activity

Administrative services

Agriculture (production)

Arts, events and recreation

Commerce

Construction

Food services

Health services

Information and communicati…

Lodging

Manufacturing industries

Professional activities

Transport

33.83%

3.98%

50.00%

26.74%

39.94%

63.74%

11.81%

31.98%

61.38%

42.01%

19.45%

19.36%

Individuals employed in specific economic sectors were more likely to be laid off or have their job suspended due to the COVID-19 crisis than individuals in other sectors. Individuals employed in accommodation and catering services are significantly more likely to be suspended or laid off due to the COVID-19 crisis. Note: The data is not necessarily representative of each sector displayed.

Percentage of employees laid off or suspended due to crisis

25.0%

4.4%

Suspended Laid off

Responses

Sectors such as energy and gas, financial services and real estate are not displayed due to the lower number of responses.

6/11/2020 6

Percentage of employees laid off or suspended due to crisis

Percentage of employees laid off or suspended due to crisis by enterprise size

Percentage of employees

En te rp ri se s iz e

Micro

Small

Medium/Large

42.9%

39.7%

24.7%

30.9%

32.8%

22.2%

11.9%

7.0%

2.5%

Suspended or Laid off Suspended Laid off

6. EFFECTS OF COVID-19 ON EMPLOYMENT ACCORDING TO ENTERPRISE SIZE

Individuals employed by microenterprises were more likely to be laid off or have their jobs suspended than individuals employed by larger enterprises. Data shows that microenterprises are more likely to be characterized as informal in Honduras. This means that these employees are less likely to have access to unemployment protections. These findings suggest that the COVID-19 crisis is likely to reinforce inequalities in Honduran society, leaving the most vulnerable relatively worse-off than before the COVID-19 crisis.

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7. EFFECTS OF COVID-19 ON WOMEN-OWNED BUSINESSES

Percentage of enterprises in operation by sex of proprietor

Percentage of enterprises

Se x of p ro pr ie to r

Male

Female

55.9%

44.1%

Percentage of enterprises which sold in April 2020 by sex of proprietor

Percentage of enterprises

Se x of p ro pr ie to r Male

Female

32.5%

22.9%

Percentage of employees laid off or suspended by sex of proprietor

Percentage of employees

Se x of p ro pr ie to r

Male

Female

27.8%

32.5%

Responses

Women-owned businesses are more likely to be closed and less likely to have made sales by April 2020 than male-owned businesses.

Women-owned businesses also tended to have suspended and laid off a significantly higher percentage of employees than male-owned businesses. Data shows women-owned businesses tend to employ a higher percentage of women than male-owned businesses. This finding suggests women are disproportionately affected (as owners and employees) by the COVID-19 crisis and that the crisis is likely to further exacerbate the gender gap in Honduras and further reduce women's economic participation.

6/11/2020 8

Duration enterprises can continue to operate in COVID-19 context before closing

Percentage of enterprises

D ur at io n be fo re c lo si ng o pe ra tio ns

1 to 3 months (end of July)

Less than one month (end of May)

3 to 6 months (end of October)

6 to 12 months (May 2021)

More than one year

41.1%

23.2%

19.6%

9.9%

6.2%

Responses

For enterprises still in operation, the median identified that they could operate in the current context of COVID-19 until by the end of July 2020 before closing operations.

8. DURATION ENTERPRISES CAN CONTINUE TO OPERATE IN THE CURRENT CONTEXT

For enterprises still in operation as of May 2020, the median enterprise indicated that they could survive until the end of July 2020 before closing operations. There remains an urgent need to find solutions to the crisis and/or provide relief so that a sufficient number of businesses can survive the COVID-19 crisis, sustain economic growth and regain lost jobs due to the crisis.

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Extension of payments and contributions

46%

Extension in submission of declarations

53%

Tax discounts

21%

Financial relief

34%

Negotiation of labor agreements

29%

Worker relief

12%

9. USE AND CONTRIBUTION OF GOVERNMENT RELIEF MEASURES

This measure includes the extension of income tax payments, payments on deposit, payments to the RAP and the individual contribution to IHSS

This measure includes solidarity contributions program and the tourism sector relief program.

This measure includes the 8.5% discount for paying income tax on April 30 and 10% for retaining employees.

It includes the agreement between the employer/worker on the advancement of holidays, vacations, and labor rights. With the approval of the STSS.

This measure includes deferment of payments or refinancing of loans with banks and/or

BANPROVI.

This measure includes the extension of ISR, ISV and Bank Transfer pricing.

71.7% of the enterprises had used relief measures offered by the government of Honduras as part of the recovery package for the COVID-19 crisis. The median enterprise used two government relief measures. The rating of these measures was a 4 on a scale of 1 (no impact) to 10 (high impact). Enterprises tended to respond unfavorably that these measures had made a significant contribution to their enterprises to the COVID-19 crisis. The highest rated measures were financial relief, tax discounts and worker relief programs.

Responses

Percentage of enterprises which had access to government relief measures

71.7%

Median number of relief measures used

The median rating of the measures by enterprises

Rating of government relief measures by enterprises 1 (no impact) a 10 (high impact)

Percentage of enterprises

R at in g of th e re lie f m ea su re s

21.6%

6.0%

2.8%

17.0%

10.7%

8.8%

Percentage of enterprises that used specific government relief measures

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Rating of contribution of relief measures, by number of measures used by enterprises

Number of measures used

R at in g of c on tr ib ut io n of m ea su re s

1 2 3 4 5 6

The percentage of enterprises that responded had used relief measure, by number of measures used by enterprises

Percentage of enterprises

N um be r of r el ie f m ea su re s us ed

28%

3%

15%

21%

4%

21%

8%

10. RELATIONSHIP BETWEEN THE USE AND CONTRIBUTION OF RELIEF MEASURES

The reported level of contribution of government relief measures varied by the number of measures used by enterprises. This finding suggests that a key factor for the effectiveness of government relief programs is to ensure access to those measures. The main reasons why enterprises reported not using measures were 1. the measures were not tailored to the needs of their enterprise 2. the enterprise did not meet the requirements to use the measure 3. the enterprise was not aware of the relief measures available or how to access them and 4. the enterprise do not perceive a significant contribution of the measure to the recovery of their enterprise.

Median number of government relief measures used by enterprises for COVID-19

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11.USE OF GOVERNMENT RELIEF MEASURES ACCORDING TO TYPE OF ENTERPRISE

Women-owned enterprises, micro-enterprises and informal enterprises were less likely to have used government relief programs. With respect to differences by sector, enterprises in the arts, events and recreation sector were significantly less likely to have used government relief measures than enterprises in other sectors. These findings point to gaps in both access and use of government-sponsored relief measures, which may affect the likelihood of these enterprise profiles to recover from the COVID-19 crisis.

Percentage of enterprises which used government relief measures, by size of enterprise

Percentage of enterprises

Si ze o f e nt er pr is e

Micro

Medium/Large

Small

66%

89%

90%

Percentage of enterprises which used government relief measures, by sex of proprietor

Percentage of enterprises

Se x of p ro pr ie to r Female

Male

67%

76%

Responses

Responses

Percentage of enterprises which used government relief measures, by enterprise formality

Percentage of enterprises

Fo rm al ity o f e nt er pr is e

Formal

Informal

91%

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Money from friends and family

34%

Support from other enterprises

8%

Business insurance

2%

Percentage of enterprises with access to safety nets

46.8%

12. USE AND CONTRIBUTION OF SAFETY NETS BY ENTERPRISES

There are a variety of non-governmental safety nets in a market system. Nearly half of all enterprises used one or more of these safety nets to cope with the crisis. Rating these measures on a scale of 1 (no impact) to 10 (high impact), most enterprises rated these safety nets as a 6. Enterprises tended to respond favorably that these safety nets had a significant contribution to their ability to cope with the COVID-19 crisis. The most widely used safety net was monetary support from family or friends. However, the safety net valued as having the most significant contribution was support received from other enterprises. These findings point to the importance of strengthening support networks between enterprises to be able to manage risk and cope with shocks such as COVID-19.

Rating of contribution of safety net

Rating of contribution of safety nets on a scale of 1 (no impact) to 10 (high impact)

Percentage of enterprises

R at in g of c on tr ib ut io n of s af et y ne t ( to

0)

8.3%

15.4%

17.5%

5.8%

5.8%

8.5%

12.7%

5.8%

10.6%

9.6%

Responses

Percentage of enterprises which used safety nets by type of safety net

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Webinars

52% Online training

28%

Direct technical support (1-1)

6%

Financial support

1%

Percentage of enterprises with access to assistance

59.5%

13. ASSISTANCE PROVIDED BY CHAMBERS, CEDs, NGOs AND OTHER ORGANIZATIONS

Chambers, NGOs and other organizations have provided technical assistance to enterprises in response to the COVID-19 crisis. The median rating of these measures by enterprises on a scale of 1 (no impact) to 10 (high impact) was a 5. Enterprises tended to respond more neutrally that this assistance had a significant contribution to their ability to cope with the COVID-19 crisis. The most common form of assistance used was webinars. Technical assistance and more direct training were rated as having a higher contribution than webinars but were less used. Few enterprises identified receiving any type of financial assistance since the COVID-19 crisis began.

Rating of contribution of assistance by enterprises on a scale of 1 (no impact) to 10 (high impact)

Percentage of enterprises R at in g of c on tr ib ut io n of a ss is ta nc e

(1 to

0)

5.5%

8.3%

19.6%

2.9%

12.8%

10.9%

10.1%

12.5%

6.7%

10.6%

Median qualification of contribution

Responses

Percentage of enterprises which received assistance by type of assistance

6/11/2020 14

Median percentage of biosecurity measures adopted by enterprises to prevent COVID-19

The survey asked enterprises whether they had adopted 15 different biosecurity measures (one of which was only applicable to restaurants). The median enterprise reported that it adopted 78.57% of the applicable biosecurity measures to prevent COVID-19. Four out of five enterprises consider that they had adopted sufficient biosecurity measures for COVID-19 to reopen. Enterprises that reported being ready to reopen tended to report a higher percentage of biosecurity measures adopted - 83% of biosecurity measures adopted compared to 64% of biosecurity measures adopted by enterprises that reported that they were not ready to reopen.

Percentage of biosecurity measures adopted, by whether enterprise reported being prepared to reopen

If enterprise is prepared to reopen

Pe rc en ta ge o f b io se cu ri ty m ea su re s ad o…

Prepared Not prepared

83%

64%

14. BIOSECURITY MEASURE ADOPTION

Percentage of enterprises that consider that they are ready to reopen

Percentage of enterprises

Prepared

Not prepared

78.8%

21.2%

Respuestas

6/11/2020 15

Knowledge

18%

15. BARRIERS TO ADOPTION OF BIOSECURITY MEASURES

Enterprises identified barriers to the adoption of biosecurity measures to prevent COVID-19. The most frequently mentioned barrier was money. In the inferential analysis, the three most predictive barriers to adopting biosecurity measures were knowledge, trained staff and money. In inferential analysis, barriers to adoption of specific measures varied significantly by biosecurity measure. The following pages identify the most significant barriers for each biosecurity measure.

Physical installations

22% Trained staff

28% Access to inputs

31% Money

64%

Percentage of enterprises that identified barrier to adoption of biosecurity measure

Responses

Responses

Responses

Responses

6/11/2020 16

Perception of probability of contagion

Perceived probability of contagion

Pe rc en ta ge o f e nt er pr is es

1 Low 2 Medium 3 Large

33.5% 40.2%

26.3%

16. PERCEPTIONS ABOUT ADOPTION OF BIOSECURITY MEASURES

Perception of severity 88.9% of enterprises perceive the COVID-19 virus as "very serious" compared to other diseases.

Effectiveness of measures 89.1% of enterprises believe that by adopting biosecurity measures they will prevent the spread of COVID-19 to their employees and customers.

Social norms 97.3% of enterprises consider that their clients and employees will accept the application of biosecurity measures

The study also looked at social norms and perceptions that influenced the adoption of biosecurity measures. Most enterprise owners perceived the threat of COVID-19 as serious. Enterprises tended to perceive the risk of infection to that their employees and customers as medium if they reopened operations. In general, enterprises considered the proposed biosecurity measures to be effective in the prevention of COVID-19. There was little perceived concern about social norms affecting the adoption of biosecurity measures.

Responses

Responses

Responses

6/11/2020 17

17. ADOPTION OF BIOSECURITY MEASURES 1 TO 6

1-Disinfection spaces

Don´t… 6.9%

85.9% Use

Workers, customers and visitors have access to a place to wash their hands with soap and water or have alcohol gel 70% available

Barriers #1 trained personel

#2 physical facilities

2- Personal protective equipment

Not a… 3.9%

Use 90.8%

Barreras #1 trained personel

#2 perception of probability

3- Distance between workers

15.0%

15.0%

Use 70.0%

Don´t use

Not …

Provide employees with face masks and gloves with measures for proper cleaning or disposal to avoid contamination.

Workers use phones, desks, offices or other tools different from their colleagues. Staff who prepare products have no contact with staff who leave the establishment.

Barreras #1 physical facilities

4-Visual signals

30.…

Not … 22.9%

46.5% Do…

Use

Place visual cues such as floor decals, colored tape, or signs to tell customers where to stand during the checkup.

Barriers #1 social norms

#2 trained personel

#3 money

5- Information signs

37.2%

15.7%

47.2% Don´t use

Not app…

Use

Informational signs posted in the most visible places, including: symptoms, prevention measures and telephone lines in case of possible contagion.

Barriers #1 knowledge

#2 money

6- Cleaning and disinfection

Don´… 7.9%

88.4% Use

Barriers #1 knowledge

Routine cleaning and disinfection of surfaces, equipment and other items in the work environment that are frequently touched such as door handles, tables, countertops, carts and shopping baskets

The following graphs show the percentage of enterprises that use and do not use specific biosecurity measures, or if the enterprise indicated that the measure does not apply. Inferential analysis was used to identify the main barriers for each measure.

6/11/2020 18

18. ADOPTION OF BIOSECURITY MEASURES 7 TO 12

7- Exchange of money

16.7%

19.6% Use 63.8%

Don´t use

Not a…

When exchanging money, place the money on the counter instead of directly between the hands, clean the counter between each customer.

Barriers #1 knowledge

8- Waste disposal

14.0%

11.7%

Use 74.3%

Don´t use

Not …

Barriers #1 social norms #2 knowledge

9- Hospital information

32.6%

6.5%Use 60.9%

Don´t use

Not ap…

Waste should be put in a plastic garbage bag and tied up when full. There is a specific space for placing bio-security or hazardous waste.

Information of authorized hospitals near your establishment with the exact address and telephone number.

Barriers #1 knowledge

#2 perception of efficacy

10- Monitoring equipment

41.7%

Not a… 15.3%

43.0% Don´t u…Use

Non-physical contact temperature measuring instruments for rapid identification and isolation of potentially infectious individuals

Barriers #1 money #2 trained personel

11- Staff health log

48.5%

Not… 16.…

35.5…

Don´t … Use

Daily log of the health status of its staff, which details general data, visual fitness, temperature and other measures.

Barriers #1 trained personel

#2 knowledge #3 money

12- Sick leave policy

21.8%

15.6%62.…

Don´t …

Not …Use

Barriers #1 trained personel

#2 money #3 physical facilities

Enable workers to stay home if they are sick, with leave policies that are flexible, non-punitive, and consistent with public health guidelines

The following graphs show the percentage of enterprises that use and do not use specific biosecurity measures, or if the enterprise indicated that the measure does not apply. Inferential analysis was used to identify the main barriers for each measure.

6/11/2020 19

19. ADOPTION OF BIOSECURITY MEASURES 13 TO 15

13- Staff training

23.3%

7.4%

Use 69.4%

Don´t use

Not a…

Apropriate education and information materials on worker safety and health, including proper hygiene practices and use of personal protective equipment.

Barriers #1 trained personel

#2 knowledge #3 money

14-Work schedules

54.8%

20.9%

24.3%

Use

Not applic…

Don´t use Barriers

#1 trained personel #2 knowledge

#3 physical facilities #4 money

Alternate days or additional work shifts, shifts and specific areas for taking breaks and meal times that reduce the total number of workers in a facility at any given time.

15 - Product traceability (restaurants)

Use 25.9%

44.0%

30.1%

Not appli…

Don´t use

The person receiving the product knows the names of the people who prepared the product (applies to food service or food preparation)

Barriers #1 trained personel

#2 money

The following graphs show the percentage of enterprises that use and do not use specific biosecurity measures, or if the enterprise indicated that the measure does not apply. Inferential analysis was used to identify the main barriers for each measure.

6/11/2020 20

Percentage of enterprises that sold goods and services on the internet

27.5%

Percentage of enterprises that sold in April 2020 (if sold online)

Yes, sold on-line 39.22%

No 24.17%

20. RAPID ADAPTATIONS BY ENTERPRISES TO THE COVID-19 CRISIS

Percentage of enterprises that supported employees to work from home

23.7%

Percentage of enterprises that sold in April 2020 (if teleworked)

Yes, teleworked 47.76%

No 22.24%

Percentage of enterprises that provided capacity building and training to staff

33.1%

Percentage of enterprises that sold in April 2020 (if trained staff)

Yes, trained staff 37.54%

No 23.73%

Percentage of enterprises that conducted outreach and marketing to clients

32.1%

Percentage of enterprises that sold in April 2020 (if marketed)

Yes, marketed 39.76%

No 22.86%

Percentage of enterprises that created or strengthened commercial alliances

17.1%

Percentage of enterprises that sold in April 2020 (if strengthened alliances)

Yes, strengthened alliance 44.57%

No 24.97%

% enterprises that sold

70% of enterprises took one or more of the following actions to adapt to the COVID-19 crisis. Enterprises that reported taking these actions were more likely to report sales in April 2020 and that they could manage the COVID-19 crisis for a longer duration before closing than enterprises that did not adopt these actions. These findings support the conclusion that a significant number of enterprises are taking actions to adapt, and to some degree, mitigate the effects of the COVID-19 crisis on their enterprise.

Responses

% enterprises that sold% enterprises that sold% enterprises that sold% enterprises that sold

6/11/2020 21

Percentage of enterprises which reported having access to finance

34.0%

Do not … 66.0%

Have finance

Percentage of enterprises with access to finance, by enterprise size

Medium/Large

Small

Micro

73.8%

53.4%

27.0%

Percentage of enterprises with access to finance, by sex of proprietor

Male

Female

40.9%

25.1%

Percentage of enterprises that reported needing additional finance

85.3%

No 14.7%

Need finance

21. ACCESS TO FINANCE FOR ENTERPRISES DURING THE COVID-19 CRISIS

One in three enterprises reported that they had access to finance. Eighty-five per cent of enterprises, including those that already had finance, reported that they needed additional financing. Smaller and women-owned enterprises tended to report not having access to finance than larger and male-owned enterprises. Enterprises that had financing were more likely to be in operation and to report sales in April 2020. This finding indicates that barriers to access to finance prevent enterprises from coping with the COVID-19 crisis.

Responses

Responses

Responses

6/11/2020 22

Percentage of enterprises that reported intent to transform business models

77.9%

No 22.1%

Yes

22. BUSINESS MODEL TRANSFORMATIONS IN RESPONSE TO COVID-19 CRISIS

Responses

To adapt to the COVID-19 crisis, three out of four enterprises reported their intent to transform their business model. Most enterprises expressed that they are in the process of making these changes. Those that reported success in making these changes were statistically more likely to be in operation and have maintained employees than those that did not make the change. These findings indicate that it is critical to support enterprises to successfully make business model changes to mitigate business closures and avoid job losses.

Percentage of enterprises responding by degree of progress in change to business model

Degree of progress in change

Pe rc en ta ge o f e nt er pr is es

1 Have not started

2 In process 3 Have completed

30.6%

63.1%

6.2%

Responses

Percentage of employees suspended or laid off by degree of progress in change to business model

Degree of progress in change to business model e m pl oy ee s su sp en de d or la id o ff

1 Have not started

2 In process 3 Have completed

47.0%

34.8%

6.4%

6/11/2020 23

23. RESILIENCE CAPACITIES AND CONFIDENCE IN ENTERPRISE RECOVERY TO COVID-19 CRISIS

Honduran enterprise owners overall are confident in the recovery of their enterprise to the COVID-19 crisis. Confidence varied by type of resilience capacity. The confidence in accessing the support of other enterprises and trust that the enterprise will be treated fairly and transparently by government rules proved in inferential analysis to be the two most predictive factors for enterprise owners' confidence in the recovery. This is different from the first panel where the ability to find buyers, learn from the crisis and change products and services were the most significant predictive factors. These findings suggest that businesses are not able to manage this shock in isolation simply by just transforming individually to enterprises. Enterprises need broader enabling systems including cooperative networks and transparent and reliable institutions to mitigate, adapt and recover from the COVID-19 crisis.

Change products

71%

Access the support of other enterprises

79%

Find new buyers

90%

Be treated fairly by government rules

62%

Access financing

82% Find new suppliers

78% Renegotiate contracts

79% Percentage of enterprises that express confidence in recovery from COVID-19 crisis

Si 94.1%

No 5.9%

Responses

Percentage enterprises confident in recovery, by if can access support of other enterprises

% enterprises confident in recovery

Ca n ac ce ss s up po rt

Yes

No

85%

15%

In the context of the COVID-19 crisis, are you confident that your enterprise can

Percentage enterprises confident in recovery, by if can trust will be treated fairly and transparently by government rules

% enterprises confident in recovery

Ca n tr us t t re at ed fa ir ly

Yes

No

72%

28%

6/11/2020 24

24. OTHER SHOCKS AFFECTING ENTERPRISES DURING THE COVID-19 CRISIS

Honduran enterprises reported being affected by crises or shocks concurrent to the COVID-19 crisis. The more shocks the enterprise experienced, the less confident the enterprise in its its eventual recovery from COVID-19. Inferential analysis identified extortion and electricity disruptions as the most significant shocks that affected enterprise confidence in recovery. These findings suggest that the combination of COVID-19 with other shocks is likely to make it more difficult for enterprises to cope with the COVID-19 crisis.

Percentage of enterprises reported had been affected by type of shocks

Transport interruptions

Provision public services

Insecurity

Regulation

Electricity Disruption

Political issues

Market prices

Customs procedures

Climate shocks

Extortion

43%

42%

36%

33%

24%

22%

18%

11%

7%

5%

Responses

Percentage enterprises confident in recovery, by whether reported being extorted

% enterprises confident in recovery

Ex to rt io n Yes

No

5%

95%

Percentage enterprises confident in recovery, by whether affected by electricity disruption

% enterprises confident in recovery

El ec tr ic ity D is ru pt io n

Yes

No

23%

77%