Like many of the small businesses in Honduras, Doris Beauty Salon in Tegucigalpa suffered a significant loss of business in 2020 when COVID-19 emerged, leading to lockdowns and social distancing.
“My business was at its best and we were growing rapidly, but with the pandemic everything went downhill,” said owner Doris Leticia Varegas. Being a woman entrepreneur compounded these challenges. Less than one-quarter of the small and medium enterprises (SMEs) in the country are owned by women, reflecting in part the difficulties women face accessing financing.
Doris Beauty Salon is one of many businesses that were able to weather COVID-related economic disruptions due to DFC financing in support of the Central American Bank for Economic Integration (CABEI). DFC financing helped CABEI — a regional multilateral development bank — provide working capital, capital financing, and startup loans to micro, small and medium enterprises in Honduras, El Salvador, and Guatemala.
With individual loans as small as $5,000 to businesses that often have fewer than 10 employees, CABEI says it has been able to protect almost ten thousand jobs since the pandemic began.
“It’s amazing how we’ve been able to get back on our feet,” said Varegas.
Varegas, pictured here in her salon, is just one of many women entrepreneurs that have benefited from an economic jumpstart provided by DFC financing to CABEI.
This week DFC CEO Scott Nathan travels to Honduras to meet partners and explore additional ways to advance economic growth in a country where economic insecurity is one of the root causes of migration. Recent data show that almost half of all Hondurans live below the poverty line and one-third of all workers are underemployed.
Banco Lafise Honduras is another critical DFC partner in advancing economic stability by supporting the country’s small businesses and entrepreneurs, which employ 70 percent of the Honduran workforce. A DFC loan guaranty to Lafise is supporting on-lending to many of those SMEs most in need of support, including women-owned businesses and businesses in the health sector such as clinics, hospitals, and pharmacies that are doing the essential work to combat COVID.
This guaranty is expected to have a far-reaching impact, reaching up to 150 Honduran businesses and providing the capital to help them both weather economic uncertainty and ultimately expand so they can employ more workers to offer more essential services.