BACKGROUND OF THE STUDY
The main aim of setting of any business
organization is to maximize profit. This can be achieved through an efficient
management of it human and material resources so as to bring about increased output.
In order to attain this noble objective
of profit maximization business organization need to have some degree of
effectiveness in their credit management. This is necessary because it is the
only way that the business owner can be able to remain buoyant financially so
that pressing obligation of the organization will be met.
Credit management was encouraged by this
rising increase in the size of business. The industrial revolution in Europe in
the early nineteenth century brought about technological advancement in most
business organizations.
The result was an increased production
of goods and service. These are then the need for entrepreneurs to obtain from
financial institution so as to be meet up with various costs that usually occur
in the production process. It then becomes necessary for such financial
institution to issue credit since most business was unable to produce the whole
bulk of the goods on cash basis.
Business organization must set standard
to facilitate the recovery of its cash on time these set down rules and
regulation has a profound effect on both parties, i.e financial institutions
and the customers, this is the constitute effectiveness of credit management in
such financial institution.
The word credit is derived from the Latin
word credo which means to believe or brush credit period allowed for payment of
goods and services already delivered to the customers.
Faith is an important pre-requisite in
the management of credit because if you trust somebody that means you already
have faith in that particular person. So faith serves as a motivating factor in
the process of granting credit to a customer, this can only change at the
process of granting credit to a customer, this can only change if the customer
should abuse the confidence reposed on him along the line. Therefore there is
usually element of risk when carrying out credit transaction since there is usually
the uncertainty of payment.
Anonymous, U (2020). The Nature of Credit Management Being Employed in United Bank For Africa Plc Idah Branch During The Under Review 1994-2000. Afribary.com: Retrieved March 04, 2021, from https://afribary.com/works/the-nature-of-credit-management-being-employed-in-united-bank-for-africa-plc-idah-branch-during-the-under-review-1994-2000
User, Anonymous. "The Nature of Credit Management Being Employed in United Bank For Africa Plc Idah Branch During The Under Review 1994-2000" Afribary.com. Afribary.com, 10 Sep. 2020, https://afribary.com/works/the-nature-of-credit-management-being-employed-in-united-bank-for-africa-plc-idah-branch-during-the-under-review-1994-2000 . Accessed 04 Mar. 2021.
User, Anonymous. "The Nature of Credit Management Being Employed in United Bank For Africa Plc Idah Branch During The Under Review 1994-2000". Afribary.com, Afribary.com, 10 Sep. 2020. Web. 04 Mar. 2021. < https://afribary.com/works/the-nature-of-credit-management-being-employed-in-united-bank-for-africa-plc-idah-branch-during-the-under-review-1994-2000 >.
User, Anonymous. "The Nature of Credit Management Being Employed in United Bank For Africa Plc Idah Branch During The Under Review 1994-2000" Afribary.com (2020). Accessed March 04, 2021. https://afribary.com/works/the-nature-of-credit-management-being-employed-in-united-bank-for-africa-plc-idah-branch-during-the-under-review-1994-2000