EFFECT OF COVID-19 ON LOAN REPAYMENT OF SMALL BUSINESSES IN KENYA: A CASE STUDY OF EASTLEIGH BUSINESS COMMUNITY

Authors

  • Fidow Abdikadir Noor United States International University (USIU)

DOI:

https://doi.org/10.47604/ejbsm.1122

Keywords:

Pandemic Outbreak, Small Businesses, Loan Repayment.

Abstract

Purpose: The aim of this research is to investigate empirically the effect of pandemic outbreaks on loan repayment of small enterprises in Eastleigh business community, with particular focus for those who used borrowed fund in starting and operating their businesses.

Design/methodology/approach: The target population of the study was the business community of Eastliegh, and samples of 50 businesses were randomly selected from the population. descriptive statistics were used to analyze the mean, mode, median, and the variance of the collected data. Regression and correlation were used to analyze the strength and the direction between the relationships of the different variable.

Findings: The research results indicated statistically significant negative relationship between pandemic outbreak and loan repayment ability of small businesses in Easteigh, r(-.54), with p value of 0.008.

Unique contribution to theory, practice, and policy: Pandemic outbreak affects business performance and survival in different ways. Small business owners, regulators, lenders, and the general public may benefit from this research by considering the impact of disruptions on small businesses. The study is one of the first to respond to the effect pandemic outbreak on small businesses after covid-19 pandemic eruption. Conducting this study was indispensable because of the importance of small businesses for the economy of any country and the current situation of covid-19 pandemic impact on them, specifically those who borrowed the fund they had invested.

Downloads

Download data is not yet available.

References

Aluga, M. A. (2020). Coronavirus Disease 2019 (COVID-19) in Kenya: Preparedness, response and transmissibility. Journal of Microbiology, Immunology and Infection.
Antonescu, D. (2020). Supporting small and medium size enterprises through the COVID-19 crisis in Romania. Central European Journal of Geography and Sustainable Development, 2(1), 38-57.
Bartik, A. W., Bertrand, M., Cullen, Z., Glaeser, E. L., Luca, M., & Stanton, C. (2020). The impact of COVID-19 on small business outcomes and expectations. Proceedings of the National Academy of Sciences, 117(30), 17656-17666.
Bismans, F., & Mougeot, C. (2009). Austrian business cycle theory: Empirical evidence. The Review of Austrian Economics, 22(3), 241-257.
Cachanosky, N., & Lewin, P. (2016). Financial foundations of Austrian business cycle theory. In Studies in Austrian macroeconomics. Emerald Group Publishing Limited.
Central Bank Of Kenya (2018). Commercial Banks and Microfinance Institutions in Kenya. www.cbk.go.ke accessed on 15th October 2018.
Chan, K., Kuo, W., Lin, C. Y., & Lin, T. C. (2020). Firm Trustworthiness and Bank Loan Pricing. Available at SSRN 3535237.
Farrell, D., & Wheat, C. (2017). Small business segments for research-based policymaking. JPMorgan Chase Institute. https://www. jpmorganchase. com/corporate/institute/insight-mapping-smb-segments. htm.
Fernandes, N. (2020). Economic effects of coronavirus outbreak (COVID-19) on the world economy. Available at SSRN 3557504.
Friedman, M. (1969). The optimum quantity of money, and other essays (No. HG538 F866).
Gorbalenya, A. E. (2020). Severe acute respiratory syndrome-related coronavirus-The species and its viruses, a statement of the Coronavirus Study Group. BioRxiv.
Gorbatenko, D. (2017). A New Approach to Austrian Business Cycle Theory. Available at SSRN 3055121.
Ivanov, D. (2020). Predicting the impacts of epidemic outbreaks on global supply chains: A simulation-based analysis on the coronavirus outbreak (COVID-19/SARS-CoV-2) case. Transportation Research Part E: Logistics and Transportation Review, 136, 101922.
Kagwaini, D. M., Marima, L., Kioko, M., Ronald, G., Mwaura, J., Odhiambo, D., ... & Chege, E. (2020). Financing & Investment Decisions Amid Covid-19 Lockdown: Interviews Conducted From Various Businesses In Nairobi.
Keeler, J. P. (2001). Empirical evidence on the Austrian business cycle theory. The Review of Austrian Economics, 14(4), 331-351.
Kimani, J., Adhiambo, J., Kasiba, R., Mwangi, P., Were, V., Mathenge, J., ... & Becker, M. (2020). The effects of COVID-19 on the health and socio-economic security of sex workers in Nairobi, Kenya: Emerging intersections with HIV. Global Public Health, 1-10.
Lakuma, P. C., Sunday, N., Sserunjogi, B., Kahunde, R., & Munyambonera, E. F. (2020). How have the COVID-19 Pandemic Impacted Ugandan Businesses? Results from a Business Climate Survey.
Lederman, R., Kurnia, S., & Lederman, J. (2009). Designing supply chain systems to cope with catastrophes. PACIS 2009 Proceedings, 92.
Love, J. H., & Roper, S. (2015). SME innovation, exporting and growth: A review of existing evidence. International small business journal, 33(1), 28-48.
Maengwe, J. O., & Otuya, W. I. (2016). A critical review on micro-financing of small businesses in Kenya. Pyrex Journal of Business and Finance Management Research, 2(2), 006-011.
Maengwe, J. O., & Otuya, W. I. (2016). A critical review on micro-financing of small businesses in Kenya. Pyrex Journal of Business and Finance Management Research, 2(2), 6-11.
Mwangi, B. W., & Muturi, W. (2016). Effects of credit risk management on loan repayment performance of commercial banks in Kenya. International Academic Journal of Economics and Finance, 2(2), 1-24.
Ntsomboh-Ntsefong, G., Shariati, M. A., Khan, M. U., & Karapetkovska-Hristova, V. (2017). Incidence of avian flu shocks on poor household livelihoods of poultry farmers in Africa. International Journal of Avian & Wildlife Biology (IJAWB), 2(1), 7-11.
O'Regan, N., Sims, M. A., & Gallear, D. (2008). Leaders, loungers, laggards. Journal of Manufacturing Technology Management.
Ogenga, F., & Baraza, C. (2020). The Political-Economy of Covid-19 and Security in Western Kenya.
Qiu, W., Rutherford, S., Mao, A., & Chu, C. (2017). The pandemic and its impacts. Health, culture and society, 9, 1-11.
Rebmann, T., Wang, J., Swick, Z., Reddick, D., & delRosario Jr, J. L. (2013). Business continuity and pandemic preparedness: US health care versus non health care agencies. American journal of infection control, 41(4), e27-e33.
Sinagl, P. (2020). Cash-flow Risk and Industry Response to COVID-19 Outbreak. Available at SSRN 3566511.
Sohrabi, C., Alsafi, Z., O'Neill, N., Khan, M., Kerwan, A., Al-Jabir, A., ... & Agha, R. (2020). World Health Organization declares global emergency: A review of the 2019 novel coronavirus (COVID-19). International Journal of Surgery.
Turner, J., & Akinremi, T. (2020). The business effects of pandemics-a rapid literature review. Enterprise Research Centre, available at: https://www. enterpriseresearch. ac. uk/wp-content/uploads/2020/04/ERC-Insight-The-business-effects-of-pandemics-% E2, 80.
Wanjala, K. (2020). The Economic Impact Assessment of the Novel Coronavirus on Tourism and Trade in Kenya: Lessons from Preceding Epidemics. Finance & Economics Review, 2(1), 1-10.

Downloads

Published

2020-08-20

How to Cite

Noor, F. A. (2020). EFFECT OF COVID-19 ON LOAN REPAYMENT OF SMALL BUSINESSES IN KENYA: A CASE STUDY OF EASTLEIGH BUSINESS COMMUNITY. European Journal of Business and Strategic Management, 5(2), 1 – 14. https://doi.org/10.47604/ejbsm.1122

Issue

Section

Articles