M.Com. (Business Management) / In the past few years the South African cement industry was controlled by a cement cartel. The cartel is a production agreement between the following companies: Anglo Alpha Limited, Blue Circle Limited and Pretoria Portland Cement Company Limited. The Government has advised, due to the discouragement of competition resulting from the determination of market prices by the cartel, that the cartel be disbanded as from 31 December 1995. Companies within the cement industry applying for credit facilities, need to be evaluated and their credit risk analysed before they can be granted with credit. The financial information that the company provides is not adequate enough to assess the creditworthiness of the company. Other factors affecting the cement industry should also be identified to help with the evaluation. This need together with the disbandment of the cartel emphasises the fact that risk areas should now be identified that can later be used to evaluate the company's creditworthiness. Therefore a model for credit evaluation is developed.

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.

Summary in Chinese. / Thesis (M.B.A.)--Chinese University of Hong Kong. / Bibliography: l. 81-83.

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.

M.Com. (Business Management) / The provision of trade credit in the course of business is one of the accepted norms of most business operations providing higher sales volumes, but also, a certain degree of risk. As part of the credit manager's responsibilities he/she must manage the credit department in such a way as to limit the extent of the inherent risk associated with trade credit thereby maximising the marginal profit flowing from credit transactions. Traditional management strategies and techniques do not take into consideration the level of the country's economic activity, to their peril. From the retail trader (Communicomp) example, it is clear that effective credit management procedures and well trained personnel are crucial to the management of trade credit. It is also noted that during a stage of lower economic activity the risks associated with the provision of trade credit are higher, and more likely to realise a financial loss whilst impacting negatively on cash flow. It is therefore appropriate that credit managers, should in future, adopt a management style which takes into consideration the state of the country's economic activity. This would ensure that the risks associated with providing trade credit is kept within acceptable limits.

The primary purpose of the research was to develop a quantitative model which can be used for screening retail revolving charge applicants. In addition to achieving this goal, four other objectives were met.

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.