INVOLVEMENT IN PYRAMID INVESTMENT SCHEMES: A STUDY OF ENTREPRENEURS IN THE INDUSTRIAL SECTOR IN HONDURAS (#213)

Authors

Padilla-Sánchez, Gissel

Rodríguez-Gallardo, Kelly

Abstract

This research sought to identify the involvement in pyramid investment schemes by entrepreneurs in the industrial sector in Honduras. A quantitative approach with descriptive-correlational scope and non-experimental-cross-sectional design was used, surveying 103 entrepreneurs from Choloma and San Pedro Sula, Honduras who invested in a company with a Ponzi scheme intervened by the State; the data were analyzed with Pearson's Chi-Square test. A significant relationship was found between knowledge of Ponzi schemes and the variables gender (p-value 0.038; greater knowledge in men) and educational level (p-value 0.002; lower knowledge in those who only had “bachillerato” basic schooling). In addition, the investment made showed a significant relationship with monthly income (p-value 0.001, people with lower incomes were the most likely to invest) and the origin of the funds invested (p-value 0.030, mostly savings). Eighty percent of the entrepreneurs experienced significant financial losses. In conclusion, it became evident that entrepreneurs have been vulnerable in investing in Ponzi schemes, due to lack of knowledge of the systems, causing them to make investments disproportionate to their level of income. It is necessary to strengthen and promote financial education and entrepreneurship programs to avoid involvement in financial fraud.