Business performance, business relationship and trade credit terms offered to clients: The case of wholesale business in Kampala

Abstract

This study was carried out to examine the extent to which business performance, business relationship affect trade credit terms offered to clients. The objectives of the study were: To establish the level of performance and business relationships of wholesaler businesses, to examine the nature of trade credit terms offered to clients and explain the relationship between wholesaler performance, business relationship and trade credit terms offered by wholesalers.

The research was based on a cross sectional survey design. It used both quantitative and qualitative data. The study also used a correlational design in order to establish the relationship between the independent and dependent variables. Further still a regression model was used to establish which of the independent variables had a more significant effect on the dependent variable. Simple random sampling was used to select the wholesalers and sample size was determined basing on Krejcie & Morgan, (1970) method of sample selection. Results of the study revealed that there was a weak and negligible positive relationship between business performance and business relationships. There was a significant positive relationship between business performance and trade credit terms. Similarly there was a significant positive relationship between business relationships and trade credit terms. Finally it was established that business relationships contributed more than business performance to influencing trade credit terms wholesalers offer to clients.