ABSTRACT

The study evaluated credit management in a manufacturing company with particular reference to Dangote Cement Company Plc, Obajana. The study examined the challenges faced by management in formulating and implementing effective credit management policies in a manufacturing company. Questionnaires were designed and administered to the respondents. Data was presented and analyzed with the use of tables, frequencies and simple percentage while chi-square test was employed in the test of hypotheses. The research work revealed that there was an improvement in the customer’s credit policy that facilitate the development of well-being of the organsaition was achieved through special tools such as giving trade-offs and the credit creation of a smooth customer company relationship. It was therefore recommended that the company should endeavour give enough time for the repayment of credit so as to make the customers pay up with relative cases. The researcher arrived at concussion that the company is being affected negatively in terms of development through the application of credit in its business transaction. It was also recommended that the management of Dangote Cement Company Plc Obajana should make sure that they pursue large debt in the law court much more frequently so as to mind the high rate of incidence of bad debt.

TABLE OF CONTENTS
Title Page i
Approval Page ii
Dedication iii
Acknowledgments iv
List of Tables vi
Abstract vii
Table of Contents vii
CHAPTER ONE 1
INTRODUCTION 1
1.1 Background to the Study 1
1.2 Statement of the Problem 3
1.3 Objective of the Study 4
1.4 Research Questions 5
1.5 Significance of the Study 5
1.6 Scope and Limitations of the Study 6
1.7 Operational Definition of Terms 7
1.8 Organization of Work 9
CHAPTER TWO 11
REVIEW OF RELATED LITERATURE 11
2.1 Introduction 11
2.2 An Overview of Dangote Cement Company Plc, Obajana. 11
2.3 Definition of Credit Management 13
2.4 Types of Credit 13
2.5 An Overview of Credit Management in Manufacturing Industry 16
2.6 Tools Used in Credit Management Policy 18
2.7 Banking Analysis and Negotiating the Loan Application from A Manufacturing Industry. 21
2.8 References 27
CHAPTER THREE 28
RESEARCH METHODOLOGY 28
3.1 Introduction 28
3.2 Research Design 28
3.3 Area of Study 29
3.4 Sources And Methods of Data Collection 29
3.5 Population of the Study 31
3.6 Sample and Sampling Techniques 31
3.7 Methods of Data Analysis 32
CHAPTER FOUR 34
PRESENTATION AND INTERPRETATION OF RESULTS 34
4.1 Introduction 34
4.2 Data Presentation and Analysis 34
CHAPTER FIVE 50
SUMMARY, CONCLUSION AND RECOMMENDATIONS 50
5.1 Summary of Findings 50
5.2 Summary of the Study 51
5.3 Conclusion 52
5.4 Suggestions for Further Research 53
5.5 Recommendations 54
Bibliography 56
Appendix 57

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The aim of setting up any business organization is to maximize profit. This can be achieved through an effective management of its human and material resources so as to bring about increased output in order to achieve these noble objectives cam be able to remain buoyant financially so that pressing obligation of the organization will then be met.
Credit management policies were encouraged by the rising size of the business. The industrial revolution in Europe in the early nineteenth century brought about technological advancement in most business organization. The result was an increase in production in terms of goods and services.
There was then the need to sell the large volume of output that has been produced so it became absolutely important for business organizations to issue credit terms since most business men were unable to purchase whole bulk of the goods on cash basis.
A business organization must set standard to facilitate the recovery of its cash on time. The word “credit” was derived form the Latin word ‘Coden’ which means to believe or trust.

Credit period allowed for payment of goods and services already delivered to customers and faith. Facts are is important for pre-requisite in the management of credit because, if you trust somebody, that means you really have faith in that particular person. So faith serves as a motivating factor in the process of granting credit to costumers. This can only be charged if the customer should abuse the confidence imposed on him along the line. Therefore, there is usually an element of risk when carrying out credit sales since there is usually an uncertainty of payment. The nature of credit that the person involved in is at least in two dimensions.
Firstly, he must obtain credit on time so as to meet up with production schedules in time of the wages of the workers carrying out the production of goods and services which it hopes to sell.
Secondly, he must extend credit to his customers as a way of selling its, goods and services already produced. In the first case, the credit involves the business organization and a financial institution. While in the second case, the credit relationship is between the business organization and the customers.
The lack of effective and efficient management in running the business gave birth to the idea of credit management, but the major point or area which the researcher focus anchors on is that, there is the need for credit management. This credit management is the point where the researcher developed his interest and studies it critically. Therefore, efficiency must be embraced in executing credit management since the granting of credit can be personal knowledge, published reports, information bureaus service and credit specialist within the outside and outside the organization.

1.2 Statement of the Problem

Credit constitutes vital aspect of organization. The type of policy being employed by typical manufacturing industry towards maintaining a sound credit results in the improvement of quality of life and working environment. In spite of these favorable impacts on the various credit policies on the general well-being of firms, most organizations do not consider proper credit management as a vital tool for organizational survival.
Organization that do not propagate a sound credit management policy always suffer the problems of having to write some portion of their revenue off as bad debt thereby write gradually leading to detriment effect on the organization.

1.3 Objective of the Study

The general objective of the study is to examine the credit management policy in a manufacturing company, focusing on Dangote Cement Company Plc. Obajana . this objective will be achieved by pursuing the following specific goals
To ascertain the extent to which credit management policy is being employed in Dangote Cement Company.
To determine what extent it has helped in the general growth or profitability of organization.
To investigate the appropriate policy to be adopted in the credit management of manufacturing companies.
To examine the challenged faced by management in formulating the implementing effective credit management policies.