Publication: An assessment of credit management on organization performance: A case of Industrial Area, Nairobi.
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2014-11
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Mount Kenya University
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Abstract
This research paper sought to assess Credit Management on organization performance taking
Alpha Grain millers, Pembe Flour ltd, Bake ānā Bite, Supaloaf, Ndovu Millers, Packaging
Industries Ltd, Unilever Ltd, Unga Group Ltd, Kifaru Ltd and Premier Flour Millers in
Industrial area in Nairobi as the case study. The researcher looked at a few elements of credit
management including the importance of credit limit of customers, credit worthiness of
customers, credit period granted to customers and the cost of customers. The researcher looked
at the statement of the problem for the research, Objectives of the study, Study Questions,
Significance of the Study, Limitation of the study, Scope of the study and Basic Assumptions.
The researcher carried out a literature review on the importance of Credit limits, credit
worthiness, credit period and cost of credit from different authors and writers and looked at
how these elements of credit management can act as key to having a sound organizational
performance. The researcher examined the challenges that are faced by organizations in
implementing sound credit management systems and how organizations can deal with these
challenges.The study adopted survey design since it would help gather relevant information
about the topic.The questionnaires sought to outline the methodology on how the researcher
administered the questions to the respondents selected randomly. Data used descriptive
statistics and requisite conclusions were drawn.The data was analyzed using Statistical
Program for Social Science (SPSS) version 22.0 and then the results were presented in graphs,
charts and narrations. A regression analysis was duly done to show the relationship between
the variables and credit management.The findings were obtained including that most sales are
credit, lack of credit policies in companies, lack of coordination of credit control with
accounting systems, assistance by debt collectors to collect debts and that most of the credit
control managers are responsible for all the transactions involving credit. It was recommended
that credit limitation should be relooked, businesses need to have credit policies, credit systems
should be computerized, companies should seek assistance from debt collectors and that
companies should identify and scrutinize customers with whom they are dealing.
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Business administration