Industrial Innovations

Industrial Innovations

Examining the Obstacles and Solutions to the Effectiveness of Banking Loans for the Development of Small and Home-Based Businesses: A Case Study of Markazi Province

Document Type : Original Article

Author
kaveh Derakhshani Darabi
Department of Economics, Faculty of Administrative Science and Economics, Arak University, Arak, Iran.
10.61882/jii.2.3.247
Abstract
Unemployment is a prominent issue in Iran's economy, and due to its detrimental socio-economic effects, it has always been a concern for legislators and governments. Various programs have been developed and implemented in Iran's economy to decrease unemployment, one of which aims to create jobs in urban and rural areas through the development of small and home-based businesses. Providing banking loans to establish and stabilize small and home businesses is a key goal of this project. The main purpose of this research is to identify the obstacles and challenges affecting the effectiveness of small and home-based business loans in creating and stabilizing businesses. After identifying and assessing the factors, obstacles, and challenges, the Analytical Hierarchy Process (AHP) is applicated to ranking. The results indicate that institutional, environmental, and social factors are the most important with a weight of 0/318, followed by legal and bureaucratic factors, and individual and personality factors with weights of 0/242 and 0/184, respectively. Among these factors, policy instability, legal instability, and economic volatility are the most significant, with weights of 0/070, 0/053, and 0/049, respectively. In conclusion, recommendations are provided to improve the effectiveness of the loans granted to small and home-based businesses. Based on the results, unfavorable environment and unstable institutional conditions are the most important obstacles to the development of small and home businesses in Markazi Province, and accordingly, planning to improve the business environment and the structure of formal institutions has the greatest impact on increasing the effectiveness of small and home businesses in Markazi Province.
Keywords
Small Business
Home-Based Business
Effectiveness
Analytical Hierarchy Process
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Industrial Innovations
Volume 2, Issue 3 - Serial Number 7
Summer 2024
Pages 247-263

  • Receive Date 18 December 2024
  • Revise Date 02 February 2025
  • Accept Date 22 February 2025