Strategic functional management is the approach a functional area takes to achieve corporate- and business unit objectives and strategies by maximizing resource productivity. It is concerned with developing and nurturing a distinctive competence to provide a company or business unit with a competitive advantage (Wheelen, 2002:160). The credit function, with debtors as the largest current asset on the balance sheet, is such a functional area that should be concerned with providing the organisation with a competitive advantage. Although many generic organisational strategic models are available, there is a lack of guidelines on how to mange the credit function strategically. The objective of this research was to develop a framework, which could be used by credit managers as a management tool, to select those aspects of the credit function, which are relevant for an organisational strategic role. In order to achieve this goal, the following sub objectives have been identified in which the framework should enable credit managers to: scan the credit function's external and internal environments to keep in touch with opportunities and threats and to determine strengths and weaknesses, and to formulate, implement and evaluate credit and collection strategies that could contribute to organisational strategic goals. A literature study method was used to collect data to be incorporated in the development of this framework that will serve as basis for the alignment of strategic credit management principles with strategic organisational principles. The focus of the proposed framework was to use and adapt the four basic elements of Wheelen's organisational model (Wheelen, 2002:2) into a more specific model applicable for credit functions. It was concluded that a competitive advantage could be obtained by the use of this proposed strategic credit management framework. Credit managers should be trained on how to use this framework effectively and then ensure that it is implemented, evaluated, monitored and controlled on an ongoing basis. However, the applicability thereof in practice is reserved for future studies. / Prof. A. Boesenkool

Ph.D. (Mathematical Statistics) / This thesis considers the modelling and prediction of consumer credit risk events. We model consumer credit risk events (like a missed payment, a repayment or a default) by means of a discrete, real time, staggered entry counting process. Merton s (1974) structural approach is the foundation of numerous credit-risk models, as well as the Basel capital accords. The underlying assumptions of this approach are that both liability and asset levels are observable to some extent and that default, which occurs if liability levels are larger than asset levels, can occur only once. These assumptions are inappropriate for consumer credit risk, where asset and liability levels are not observable and multiple defaults may occur. We nd that the so-called reduced-form models initially developed by Artzner and Delbaen (1995) and Jarrow and Turnbull (1995), which impose no structure on the default event, are better suited to model and predict consumer credit risk. All reduced-form models can be represented as counting processes. Counting processes are continuous in nature, so we discretize these processes before applying them to the regularly spaced, discrete monthly data. We show that the use of survival analysis tech- niques such as Cox s (1972) proportional hazard model, which is a special case in counting processes, are not well suited to model credit risk. This is because survival analysis is mostly concerned with the prediction of the time until a single event occurs. Accordingly, in survival analysis the time domain used is event time . Hence, all observations need to be aligned to some starting time. We prefer to work in calendar time and are concerned with the timing (in calendar time) of multiple events. We identify and implement a dynamic, discrete statistical model based on calendar time that accounts for staggered entries, multiple entries into and exits from the portfolio, as well as multiple default events on an account level. This approach, from Arjas and Haara (1987), makes use of both idiosyncratic and systematic covariates, which facilitates stress-testing. This approach has, to our knowledge, never been applied to credit risk before and we apply it to a mortgage loan portfolio of a major bank in South Africa.

This study intends to assess determinants of nonperforming loans. The mixed research approach was adopted for the study. Survey was conducted with professionals engaged in both private and state owned Banks in Ethiopia holding different positions using a self administered questionnaire. In addition, the study used structured review of documents and records of banks and in-depth interview of senior bank officials in the Ethiopian banking industry. The findings of the study shows that poor credit assessment, failed loan monitoring, underdeveloped credit culture, lenient credit terms and conditions, aggressive lending, compromised integrity, weak institutional capacity, unfair competition among banks, willful default by borrowers and their knowledge limitation, fund diversion for unintended purpose, over/under financing by banks ascribe to the causes of loan default.

This study intends to assess determinants of nonperforming loans. The mixed research approach was adopted for the study. Survey was conducted with professionals engaged in both private and state owned Banks in Ethiopia holding different positions using a self administered questionnaire. In addition, the study used structured review of documents and records of banks and in-depth interview of senior bank officials in the Ethiopian banking industry. The findings of the study shows that poor credit assessment, failed loan monitoring, underdeveloped credit culture, lenient credit terms and conditions, aggressive lending, compromised integrity, weak institutional capacity, unfair competition among banks, willful default by borrowers and their knowledge limitation, fund diversion for unintended purpose, over/under financing by banks ascribe to the causes of loan default.

Small and medium sized enterprises have become significant component of Chinese economy. At present, the financing difficulties of SMEs have become a biggest hurdle in sustainable Development of the "bottleneck." This paper analyzes the current condition of financing of SMEs in China specifically in Tianjin and existing problems and address these issues and put forward innovative financial schemes, develop the financial system, expand financing channels, to optimize the financial environment is difficult to solve the problem of SME financing priority. It needs to find more resources for better system. Three tested and tried approaches that have worked are; First, SMEs need backing from the government and its institutions. Then, the government needs to relax loans on the SME sector. Last and third, government needs to make use of other funds such as bonds, growth financing and other ways to push for SME financing, in a quicker approach.

Organisations or individuals that lend money (banks and micro lenders) or that sell goods on credit (retailers) are classified as credit providers. The debtor enters into a contractual agreement with a credit provider, or creditor, with the obligation to repay the loan amount, fees and interest according to a predetermined schedule. The contractual agreement, also known as a credit agreement, is as a general rule very complex. Legislation protecting debtors in various ways is an international phenomenon. In South Africa, the National Credit Act, Act 34 of 2005 (NCA) was enacted in 2005. The NCA changed the playing field for credit providers participating in the South African consumer credit market to a great extent. Consumer lending is the sleeping giant of the financial sector. The key to successfully unlock this enormous market is the credit provider's ability to accurately assess the creditworthiness of a potential customer during the customer acquisition phase. The creditworthiness of the customer is related to the risk of default, i.e. a debtor's non-payment of debt in terms of the credit agreement. The risk of default is also known as credit risk. Real People Investment Holdings (Pty) Ltd (RPIH) classifies credit risk as the single largest risk the Group is exposed to. They recognise that the intelligent and responsible management of credit risk makes it the Group's largest profit driver. Credit risk scorecards are excellent decision aids during the customer acquisition phase. The characteristics and behaviour of merchants submitting credit applications to RPIH for assessment have a definite impact on the credit risk of the Group. The merchant plays a pivotal role in the debtor-creditor-supplier business model. The merchant influences the customer's sales experience and subsequent level of satisfaction with the transaction. A satisfied customer constitutes a lower level of credit risk for the creditor, in this case RPIH. The research is conducted with a positivistic paradigm. The cross-sectional study approach is used. The merchant is the unit of analysis. A sample of 77 merchants is selected from the population of 244 merchants who submitted credit applications to RPIH during the observation period. Questionnaires are used as the data collection method in this research project. The predictive ability of fourteen merchant related characteristics are demonstrated through this empirical study.

M.Comm. (Economics) / The recent global financial and economic crisis has brought about renewed interest in the nexus between credit markets and monetary policy. This research aims to contribute to the understanding of the factors that drive the demand for credit on an aggregate level, and the household and corporate sectors for the South African economy. The study assessed the equilibrium determinants of the aggregate and sectoral demand for credit in South Africa by making use of a cointegrated vector autoregression (CVAR) methodology. In addition, the periods of debt overhang and short-falls, at aggregate and sectoral levels in the credit market, are derived from these equilibrium levels. The estimated models indicate the existence of long-run relationships for the aggregate credit demand equation, a classic demand-type relationship linking aggregate credit with gross domestic product (GDP) and the lending rate is established. For credit extended to the corporate sector, the results indicate that in the long-run it is determined by investment expenditure, operating surpluses and the lending rate. Whereas for credit extension to the household sector, it was found that the lending rate, disposable income and household debt were its important long-run determinants. All the results of the estimated equations are in line with a demand-type relationship and the traditional hypothesis that credit is demanded to finance real economic transactions, namely for liquidity purposes and to finance working capital. The results of the short-term dynamics indicate that credit extension variables are the equilibrium variables, although the speed of adjustment parameter is found to be sluggish, which shows that the slow adjustment to equilibrium from shocks to the credit markets is attributable to the existence of stronger frictions and transaction costs in credit markets. These findings justify the persistent periods of credit overhang and short-falls in South Africa that this study derives from the equilibrium coefficient terms. The study shows that periods of credit overhang and short-falls are linked to the business cycle phases in South Africa.

The diploma thesis focuses on enterprise performance assessment. Based on financial analysis methods the company's financial health is evaluated. Results are compared with three competing companies. Comprehensive company performance also contains strategic analysis, credit management analysis and analysis of stakeholders' satisfaction. Recommendations and suggestions to sustain company performance are defined at the end of this thesis.

M.Com. (Business Management) / Please refer to full text to view abstract

M. Tech. (Department Management Accounting, Faculty of Management Sciences), Vaal University of Technology. / Municipal debt has been steadily rising year after year, jeopardizing the financial stability of many municipalities. There is a commonly overlooked provision within the Municipal Finance Management Act, section 64(2)(a), that states that the municipal manager must ensure that the municipality has a functional credit management and debt collection system. However, it is also the obligation of municipal residents to ensure that they pay rates and taxes for the services supplied to them in order to ensure the sustainability of service supply. Municipalities rely on revenue collection to ensure their survival and viability. Due to the importance of this sphere of government, this study investigates whether residents respond to the credit management policy of the municipality and whether it is implemented effectively. The study does so by looking at the relationship between credit management policy implementation and service delivery in the selected municipality in Sedibeng District. The study followed a quantitative research methodology, using self-administered hard copy questionnaires to collect data from 510 residents of municipality A of Sedibeng District municipality. Seven (7) different locations with the demographic of municipality A of Sedibeng District were selected to participate in the study, with a response rate of 100%. Data were statistically analysed through SPSS and testing included correlation analysis, factor analysis, frequency counting and ANOVA testing. The data collected revealed that there is a lack of credit management policy implementation and enforcement when it comes to non-payment of municipal outstanding accounts. According to the quantitative findings, residents have a negative attitude towards the credit management policy. However, the findings also showed that there are factors that influence responsiveness such as poverty, (un)employment and educational level. The findings also revealed a significant relationship between credit management policy and service delivery. Failure to pay municipal debts results in poor service delivery by municipalities. because they lack the financial stability necessary to provide a sustainable service supply. In turn, poor service delivery results in residents refusing to pay municipal debts because they are unwilling to pay for poor services. Recommendations such as continuous review of critical debt recovery policies, rebates and discount granted to residents, the introduction of advanced technical systems, quality service delivery, employee training and development and the like will assist municipalities to improve the effectiveness of their credit management policy implementation. The limitations to of study entails difficulty in obtaining municipal ethical clearance, because municipal officers are concerned about confidentiality. Furthermore, there were the COVID-19 regulations posed by the South African government to curb the spread of COVID-19 which also had an impact in collecting data from participants. The findings may not be generalised to a larger population of all South African municipalities.