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Sunday, 21 October 2018

What is credibility in Business?

Credibility has an important role in the life of a businessman. This is rare that a business is surviving without borrowed fund or outsiders debt. A businessman thinks about various factors before approaching outsider for money because this capital is very risky capital. Fixed rate of interest has to be paid either in case of profit or loss.

Have a look on the definition as per Oxford Dictionary

Definition of credibility in English:



mass noun
  • 1The quality of being trusted and believed in.
    ‘the government's loss of credibility’
    1. 1.1 The quality of being convincing or believable.
      ‘the book's anecdotes have scant regard for credibility’
    2. 1.2
      another term for street credibility


Mid 16th century: from medieval Latin credibilitas, from Latin credibilis (see credible).
Note: Definition is taken from Oxford Dictionary 

If a business is in difficulty to pay interest on time regularly then it loses trust of its lenders. On the other hand if business is regularly paying its interest then it gains trust of lenders. 

Credibility means how much is a business efficient to meet its obligations. We can say it credit rating. Good credibility means business discharges its obligations on time. Bad credibility means lenders do not have trust in business. 

Therefore it is very important for a business to maintain its credibility because once it reduces, it creates problems in business.

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