International Journal of Accounting Research

Abstract

Factors Affecting Credit Purchase Practice in Ethiopia

Yesuf Ahmedin Salih and Dhiraj Sharma*

This study was conducted to examine factors affecting the trade credit practice of private traders a case of Burie town, Ethiopia. Close ended and open ended questionnaires were used to collect primary data from 304 randomly chosen private traders. A total of ten explanatory variables namely gender, education status, marital status, size of business, age of business, access of bank loan, length of trade relationship with suppliers, frequency of purchase and number of suppliers were included in the selected model. The binary logistic model indicates trade credit practice affected by six predictor variables namely gender of private trader, access to bank loan, age of business, length of trade relationship with suppliers, frequency of purchase per month and number of suppliers. The chamber of commerce should prepare trade credit policies and standards that motivate trade credit practice.

Published Date: 2024-01-03; Received Date: 2022-12-19