Investigating Consumer Credit: Effects on Small Businesses - Report

This research report investigates the impact of consumer credit on small businesses, particularly those located on islands like in the Maldives. It explores the advantages and disadvantages of offering consumer credit, the social issues that arise from unpaid debts, and the opportunities and threats that business owners face. The study uses a mixed-methods approach, incorporating both qualitative and quantitative data collection techniques. The research delves into the challenges small businesses encounter, such as poor law enforcement, lack of finance, and skills deficits. It further examines how consumer credit affects cash flow, customer relationships, and overall business sustainability. The report concludes by highlighting the need for businesses to carefully assess creditworthiness and manage credit terms effectively to mitigate risks and maintain financial stability, utilizing insights gleaned from literature reviews and data analysis. Desklib provides access to this and many other solved assignments.

Research Project

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION....................................................................................................3
Statement of the problem.............................................................................................................3
Aim..............................................................................................................................................3
Objective......................................................................................................................................3
Research question........................................................................................................................3
Rationale......................................................................................................................................4
CHAPTER 2: LITERATURE REVIEW.........................................................................................4
Impact of small business specially located islands on consumer credit......................................4
Advantage and disadvantage to business and customers when stopping the consumer credit....4
Exact problems face as social issue due to taken credits and not returning it.............................5
The opportunities, threat to business owners about credits and social issues.............................6
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................6
Research types.............................................................................................................................6
Research approaches....................................................................................................................6
Research philosophies.................................................................................................................7
Data collection.............................................................................................................................7
Data analysis................................................................................................................................7
Sampling......................................................................................................................................7
Reliability and validity................................................................................................................8
Ethics consideration.....................................................................................................................8
CHAPTER 4: ANALYSIS AND DISCUSSION............................................................................8
CHAPTER 5: FINDING AND CONCLUSION...........................................................................20
Finding.......................................................................................................................................20
Conclusion.................................................................................................................................20
REFERENCES................................................................................................................................1

CHAPTER 1: INTRODUCTION
Small business at the island opening capital that is not so large and they have to run with
small running capital. Small business is defined and owned corporation, partnership or sole
proprietorship that has the fewer annual revenue and employees than other regular sized business
or corporation organization. Along with this small business administration that defined the small
business according to set standards based on particular industries. This research will explain
about small business issues and literature review with having various authors view and thoughts.
Also, examine about research methodology that states about various research methods used in
research projects.
Statement of the problem
Many of the people from across in Maldives that taken good and services on credit for
their small business such as cafe, corner shops, and many other business. So, those businesses
are also allow for the credit to customer and maintained their business with existing customer. As
creditors they are fail to pay and they have not respect about the credit terms as results within the
issues on society and economic burden for the business.
Aim
“To investigate the consequences on business, allowing customer to buying credit without
checking their credit worthiness.”
Objective
 To identify the impact of small business specially located islands on consumer credit.
 To find out the merits and demerits to Business and customers when stopping the
consumer credit
 To identify exact problems face as social issue due to taken credits and not returning it,
 To explore the opportunities, threats to business owners about credits and social issues.
Research question
 Does Consumer credit limit effects to Small Business?
 Does consumer credit affects the relationship between customer and business owner?
 Changes on business that do not practiced customer credit facilities?
 Does credit is creating a social issue, in a society?

Rationale
The main aim for this research is to about the large number of small business or sole
proprietor business working in Maldives and wide roll in the country economy. While more
about the large number of population that seems to credit they cannot get return and building
their rent more expensive.
CHAPTER 2: LITERATURE REVIEW
Impact of small business specially located islands on consumer credit.
According to Makun (2021), small business are increasingly which have perceived as an
important to economic growth and development. But, at islands this business seems to be loss
and many of the people are facing issue at island due to having fewer consumer. While the role
of small business is being more critical in some small islands and where size, technology and
many other resources constraints have the limit development of large business. At Maldives most
of the small business is facing huge number of problem that inhabit their entry into industry and
make their survival difficult. The results about the reveal that could be related to poor law and
security, lack of finance and appropriate skills and order that are major impediments for the
small business for growth and development.
As per Garz And et.al., (2021) said that, while changes that includes the globalization of
trade, expansion of regional economic and integration about the information through having
proper communication. In having such changes this could take place about the importance of
small business which still remains an integral component of the overall economic and present
more working business activities. This is also important for knowing about how the small
business needs to keep their proper communication and ensure them for working with some
better strategies. Small business is continuing for important contributors for having growth and
development.
Advantage and disadvantage to business and customers when stopping the consumer credit.
O'Brien And et.al., (2021) said that, offering the consumer with the trade credit that will
give the competitive edge for business rivals. Consumer will generally favour and the chance for
selling their obtaining the payment from their customer before having to pay the good and
service as they have sold to them. This is also need to offer such an incentive that bring the just
to stay competitive especially and rivals about the doing the same for having better consumer.
This could be way for bringing more competitive that offer greater terms and discount for the

early payment. An increasing the sales that what happen for start the selling on credit. Along
with this customer are likely to buy them from cash flow and that is not disrupted necessary to
pay the upfront towards the competitors.
As per Bego (2021) states, offering consumer credit that could directly affect the cash flow
for the business and lead for having loss. This will also require for checking the customer credit
references and obtaining for business credit report and ensure them for working with snapshot
and do not paint the whole picture for the company financial position. While the business and
customer are shopping on consumer credit as they have to pay the penalties and this could be
directly affected to their cash flow. Offering credit to customer is also necessary evil for
remaining the competitive at workplace.
Exact problems face as social issue due to taken credits and not returning it.
According to Mak, Zimmerman and Roberts (2021), sub-bar products that are sold by the sellers
to tool customer and increasing their sales about the problem on returning the products. Quality
check that also play the effective role for performing these products that are the magnitude of
selling that can be increased especially during the sales days. Sellers that sometimes refuse to
replace the faulty products and refund them within the consumer money. Along with this low
quality of products the money down that drain and people choose same day or some other day
deliver or paying extra money to get their product delivered. However, these products cannot
often the delivered within the stipulated consumer and time as they have to wait for same day
before they finally receive their products. This can be also seems that proceed against the
organization that however, bring with unsecured creditor that claim about subordinates to the
secured creditor.
As per Moscato, Picariello and Sperlí (2021) said that, the outcomes about uncover that could be
connected with helpless law and security, absence of money and proper abilities and request that
are significant obstacles for the independent venture for development and advancement. Along
with this consumer is facing huge issues and that will also being how the company listing for
them and keep them for working with long term. Small business also needs to understand about
how they have to manage their consumer and this could also keep them for working with better
condition.

The opportunities, threat to business owners about credits and social issues.
Shafik (2021) said that, sub-bar items that are offered by the dealers to apparatus client and
expanding their deals about the issue on returning the items. Quality check that likewise assume
the powerful part for playing out these items that are the greatness of selling that can be
expanded particularly during the business days. Merchants that occasionally decline to supplant
the flawed items and discount them inside the shopper cash. Alongside this inferior quality of
items the cash down that channel and individuals pick same day or some other day convey or
paying additional cash to get their item conveyed. In any case, these items can't frequently the
conveyed inside the specified purchaser and time as they need to sit tight for same day before
they at last accept their items.
As per Closs-Davies, Merkl-Davies and Bartels (2021) said that, offering shopper credit that
could straightforwardly influence the income for the business and lead for having misfortune.
This will likewise need for checking the client credit references and acquiring for business credit
report and guarantee them for working with depiction and don't arrange the entire picture for the
organization monetary position. While the business and client are shopping on purchaser credit
as they need to suffer the consequences and this could be straightforwardly impacted to their
income. Offering credit to client is likewise fundamental evil for staying the cutthroat at working
environment.
CHAPTER 3: RESEARCH METHODOLOGY
Research types
Research can be defined as study regarding a specific problems and concern while by using
various scientific methods. Quantitative research is the process of collecting and analyzing while
by using numerical data. Qualitative research it is process of collecting information and
analyzing with the use of non-numerical data and try to understand their concepts, opinions or
experience (Pandey and Pandey, 2021). Qualitative research data that have been used in research
are of non-numerical through which that can make their gathering information and collecting
with having more methods.
Research approaches
In these research approaches, interdisciplinary field including planning, research may be
conducted in various number ways that could help them in making their researcher. Deductive
approaches means for identifying the characteristic of any problems through having description.

Inductive process draws for some general conclusions from individual or observations. In this
research, inductive research have been used and basically in conducted research scholar have
make the use of hypotheses data and more theories for developing their research study more plus
relevant.
Research philosophies
Research philosophy has a great level for expected for having depth and devoted their research
and make the discussion more relevant. Positivism depends on the quantifiable observation along
with that statistical analysis (Hughes and Barlo, 2021). Interpretivism research means it is
process of being observed and has their main for drivers in science. It had conducted
Interpretivism research philosophy as this approaches of data collection such interview and
observation.
Data collection
Data collection is one of the important elements of research methodology. It is not possible
to conduct research without performing this step. Primary data collection sources are:
questionnaire, survey, interview and others. On the other hand, books and journals, literature,
library, internet are some sources from where, researcher gathers second hand or secondary data.
It can improve image of researcher and boost confidence when he accomplishes goal of this
research study in an effective manner.
Data analysis
For making research study effective, scholar requires performing this function just after
data collection. After collecting data, there is requirement of making collected data authenticate
otherwise it can affect image of researcher and study. All gathered information has been ordered
into themes so, SPSS analysis will be the best. With SPSS analysis qualitative tools both primary
and secondary qualitative data have been analysed
Sampling
Sampling means it is process in which researcher collects the information from various sources
of collecting information (Urcia, 2021). Hence, it being used because they have been there is no
human judgements involve which have been selected in this report. Random sampling give
chance of equal being and in making them using equally that can be easier for doing this research
topic as well research study. Hence, each equal chosen with having large number of randomly
and entirely by chance.

Reliability and validity
It is important for researcher to make use of appropriate sources that are reliable and valid.
There are several sources that are not authenticated and if researcher makes use of them then it
can hurt quality of research study. So, it is important to have knowledge in researcher of
identifying the difference between authenticate and unauthenticated sources.
Ethics consideration
Hence, the data have been collected from various books, journals, new articles and studies from
any previous things and some other basis knowledge about this topic (Chen And et.al., 2021).
This report being making more relevant and relatable and what situation right now have been
faced in upcoming future that might be not possible will be faced.
CHAPTER 4: ANALYSIS AND DISCUSSION
Theme-1: Sometime taking of goods and services on credit
1.As customer I take goods and services on
credit ? Frequency
every day 7
every month 5
some time 26
Total 38
Mean 2.5
Median 3
Mode 3
Standard deviation 0.79695

Interpretation:
From the above table and graph it can be interpreted that majority of responded i.e. 26 from a
sample of 38 take some time goods on credit while least i.e. 5 take goods on every month.
Likewise, the mean, median, mode and standard deviation of customer who take goods on credit
is 2.5,3,3 and 0.79 which shows that average number of customer take goods on credit and as the
standard deviation is 0.79 which shows that it is not far away from mean.
Theme-2: no limited credit allowed to customers
2.Does The business out lets allow limited credit to
its customers? Frequency
Yes 28
No 10
Total 38
Mean 1.2632
Median 1
Mode 1
Std. Deviation 0.44626

Interpretation:
From the above table and chart it tends to be deciphered that greater part of reacted for example
10 from an example of 38 take a few time merchandise using a loan while least for example 5
take merchandise on each month.
In like manner, the mean, middle, mode and standard deviation of client who assume
merchandise on praise is 1.2632, 1, 1 And 0.44626 which shows that normal number of client
assume products on acknowledgment and as the standard deviation is 0.44626 which shows that
it isn't far away from mean.
Theme-3: anytime the customer makes repayment of credit
3.As a customer I repay my credit Frequency
Every day 11
Every Week 6
Any time I wish 21
Total 38
Mean 2.2632
Median 3
Mode 3
Std. Deviation 0.89092
Interpretation:

From the above table and diagram it will in general be translated that larger piece of responded
for instance 6 from an illustration of 21 take a couple of time stock involving a credit while least
for instance 11 take stock on every day.
In like way, the mean, centre, mode and standard deviation of customer who accept stock on
acclaim is 2.2632, 3 and 3 which shows that ordinary number of customer expect items on
affirmation and as the standard deviation is 0.89092 which shows that it isn't far away from
mean.
Theme-4: Credit on goods and services are taken from retail sector
4. As a customer types of Business i prefer to take
credit goods and service Frequency
Retail 20
whole sale 2
Retail and Whole sale 7
None of them 9
Total 38
Mean 2.1316
Median 1
Mode 1
Std. Deviation 1.29805
Interpretation:
From the above table and chart it will overall be deciphered that bigger part of reacted for
example 7 from a delineation of 9 take several time stock including a credit while least for
example 2 take stock whole sales.
In like manner, the mean, focus, mode and standard deviation of client who acknowledge stock
on approval is 2.1316, 1,1 which shows that normal number of client anticipate things on
confirmation and as the standard deviation is 1.29805 which shows that it isn't far away from
mean.

Theme-5: 25-34 is the age of primary owner of business
5. What is the age of the primary owner of this
Business ? Frequency
Under 25 3
25-34 14
35-44 12
45-54 7
55-64 2
Total 38
Mean 2.7632
Median 3
Mode 2
Std. Deviation 1.02494
Interpretation:
From the above table and graph it will generally speaking be translated that greater piece of
responded for instance 3 from an outline of 14 take a few time including a credit while least for
instance 2 take.
In like way, the mean, concentration, mode and standard deviation of customer who recognize
stock on endorsement is 2.7632, 3 and 2 which shows that typical number of customer expect
things on affirmation and as the standard deviation is 1.02494 which shows that it isn't far away
from mean.
Theme-6: Between MVR 1000 to MVR 5000 is the amount of money taken on credit
6. What is the average amount of money credit
does customer take each month as goods and
services?
Frequency
Less than MVR 500 5
Between MVR 500 to MVR 1000 13
Between MVR 1000 to MVR 5000 18