Economic Impacts of COVID-19 on Microfinance Institutions and Small Businesses: Empirical Survey from Somalia

Nana A Afrah ,Abdullahi Ali Mohamed

doi:10.7176/ejbm/13-6-21

Abstract

The microfinance institutions promote the entrepreneurial innovations that contribute the fundamentals of a healthy economy and job creation opportunities. In Somalia, the small businesses have ever been valuable resources to encourage the economic sustainability of Somali country. After the destruction in January 26, in 1991, the people of Somalia have relied on the entrepreneurial skills to develop small businesses on which the lives of many Somali people have hinged. Therefore, this study assesses the economic impacts of covid-19 on microfinance institutions and small businesses. The study follows descriptive correlation. The overall sample consisted of 40 participants in Benadir region. The study found that covid-19 has negative impact on both microfinance institutions and small businesses as shown by the mean index of microfinance institutions 1.72 and standard deviation 0.48, likewise, the mean index of small businesses scored 1.86 and standard deviation 0.69. Key words: Economic impacts , Covid -19, Microfinance Institutions, Small Businesses, Benadir region DOI: 10.7176/EJBM/13-6-21 Publication date: March 31 st 2021

Highlights

In recent decades, there have been new several diseases that have emerged in different geographical zones, with pathogens including Ebola virus, Zika virus, coronaviruses and Nipah virus
The data was collected through telephone interview and questionnaires that were sent through Email for the target respondents with regard to the movement restrictions imposed by the government to decrease the spread of covid-19
In the findings of research, the social distancing restrictions and demand shifts from COVID19 are likely to shutter many small businesses and entrepreneurial ventures owing to the economic downturn caused by the pandemic corona virus known as covid-19

Summary

Introduction

There have been new several diseases that have emerged in different geographical zones, with pathogens including Ebola virus, Zika virus, coronaviruses and Nipah virus. Losses of time and income by carers and direct expenditure on medical care and supporting services are added to obtain the estimate of the economic costs associated with the disease. This conventional approach underestimates the true economic costs of infectious diseases of epidemic proportions which are highly transmissible and for which there is no vaccine (e.g. HIV/AIDS, SARS and pandemic influenza). The experience from these previous disease outbreaks provides valuable information on how to think about the implications of COVID-19 (Warwick & Roshen, 2020)

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