Business Ethics And The Repayment Of Loans In Small Enterprises

• Published in: Journal of applied business research 2021-03, Vol.37 (2), p.51-60
• Main Author: Worku, Zeleke
• Format: Article
• Language: English
• Subjects: Adequacy; Business ethics; Companies; Emotional intelligence; Entrepreneurs; Intelligence; Loans; Microfinance; Money; Profitability; Small business; Social capital
• ISSN: 0892-7626; 2157-8834
• DOI: 10.19030/jabr.v37i2.10371

The capacity of small business enterprises to pay back loan money to microfinance agencies is a key determinant of long-term profitability in microfinance agencies (Mayer, Caruso & Salovey, 2016). Ethiopian entrepreneurs who conduct business in South Africa rely heavily on start-up capital raised from social capital schemes (Haile, 2015). The purpose of research was to determine factors that affect the repayment of loan money obtained from social capital schemes. The study points out necessary and sufficient conditions for the repayment of loans. The research found that 84% of the migrant entrepreneurs managed to pay back their loans in time, whereas about 16% of them failed to do the same. By the standards of Mayer et al. (2016), about 71% of respondents had adequate emotional intelligence. By the standards of Sahoo and Lenka (2016), about 72% of migrant entrepreneurs possessed adequate entrepreneurial skills. One key finding of study was that the repayment of loan money to social capital schemes was dependent upon awareness about the relative importance of adhering to business ethics principals, emotional intelligence, and the profitability of businesses. The study shows that the prompt repayment of loan money to social capital schemes, the acknowledgement of business ethics principles, and the possession of adequate emotional intelligence are key attributes of profitable businesses.