Financial Impact of Large-scale Social Restriction Policy during the COVID-19 Pandemic on Entrepreneurs

Abstract

BACKGROUND: The Indonesian government has issued large-scale social restrictions (LSSR) to reduce the spread of Coronavirus Disease-19 (COVID-19). The implementation of LSSR included temporarily closing tourist attractions and places of business, which impacts the productivity of entrepreneurs.

AIM: This study aims to analyze the financial impact on entrepreneurs who undergo LSSR as an action to prevent the spread of the COVID-19 virus.

METHODS: This research was non-experimental observational research with a cross-sectional approach. The research was conducted in June–July 2020 throughout Indonesia. Sampling was carried out using the accidental sampling technique by distributing the e-questionnaire within 30 days. The criteria for the respondents included entrepreneurs, male or female, aged 12–65 years, and willing to be respondents of this research. The instrument used in this research was the e-questionnaire. The data analysis method was descriptive analysis by calculating the average income before and during the LSSR and expenses before and during the LSSR. Furthermore, it was analyzed quantitatively to determine whether there was a decrease or increase in the two tested groups. The last analysis was the significance analysis between the two tested groups. The paired sample t-test method identified when the data were normally distributed or with the Wilcoxon method when the data were not normally distributed. This study obtained 177 respondents consisting of 84 males and 93 females. Three respondents were in the age range of 12–17 years old, 98 others were in the age range of 18–25 years old, 47 respondents were in the age range of 26–45 years old, and 29 respondents were in the age range of 46–65 years old. The most of the respondents underwent LSSR for 13–16 weeks.

RESULTS: The financial impact of this study showed that the average income before implementing LSSR was Rp. 12,803,719 ± Rp. 1,418,719; the average income during the LSSR was Rp. 9,826,836 ± Rp. 1,112,228; the average expenditure before implementing LSSR was Rp. 5,231,356 ± Rp. 620,250; and the average expenditure during the LSSR was Rp. 4,611,582 ± Rp. 530,767. The average decrease in income was Rp. 2,976,271 ± Rp. 471,786 (p = 0.00) and the average decrease in expenditure was significantly Rp. 619,774 ±Rp. 196,788 (p = 0.00).

CONCLUSION: Entrepreneurs in Indonesia who underwent LSSDR during the COVID-19 pandemic experienced a significant decrease in income and decrease in expenditure.