THE NATURE OF CREDIT MANAGEMENT BEING EMPLOYED IN UNITED BANK FOR AFRICA PLC IDAH BRANCH DURING THE UNDER REVIEW 1994-2000

CHAPTER ONE

1.1 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.

1.2 OBJECTIVE OF THE STUDY
The aim and objective of this project is to assess in-depth, the credit management techniques being employed in United Bank for Africa Plc. Idah branch office and to what extent it has helped in the external economic development of the organization.
This project work also aim at investigating And finding out the appropriate policy or technique to be adopted in the credit management of United Bank for Africa Plc Idah branch office manage its credit via their policies. Finally the study aim at management at providing reasonable suggestion on how credit can be best managed in Untied Bank for Africa Plc. Idah branch office so as to enhance the concept of effectiveness in their employment.

1.3 HYPOTHESIS FORMULATION
H0: United Bank for Africa Plc Idah branch office has no effective credit management techniques.
Hi: United Bank for Africa Plc Idah branch office does give credit facilities to their customers.
Hi: United Bank for Africa Plc Idah branch office does not give credit facilities to their customers
H0: United Bank for Africa Plc Idah branch office for credit facilities.
Hi: Customers does not patronize United Bank for Africa Plc. Idah branch office for credit facilities.

1.4 SIGNIFICANCE OF THE STUDY
Credit constitutes a vital aspect of an organization’s sales. The degree of effectiveness of the credit management of a typical service industry of particularly that United Bank for Africa Plc Idah branch office is the main idea that this project is geared towards discussing policies on the general well being of the organization. The United Bank for Africa plc Idah branch office and that of the general popular in terms of sound financial footing will also be analyzed. Thus the overall policy of the organization and with its effectiveness on the granting of credit as the salient issue in which this project tend to tackle.
An organization without a sound credit management policy always suffers the problem of having to write some portion revenue of bad debts. This study is therefore, predicated on the fact that effectiveness of credit management is the main ingredient of success in business.