EVALUATION OF CREDIT MANAGEMENT IN A MANUFACTURING COMPANY (A CASE STUDY OF UDEAGBALA INDUSTRY LTD, ABA)

This study evaluates credit management practices in a manufacturing company, using Udeagbala Industry Ltd, Aba as a case study. The research examines the company’s credit policies, credit appraisal techniques, debt collection procedures, and challenges associated with credit management, while assessing their impact on liquidity and profitability. The study adopts a case study research design and utilizes both primary and secondary data. Primary data were collected through structured questionnaires administered to 30 staff members involved in finance, credit, and sales operations, while secondary data were obtained from company records, financial statements, and relevant literature. Data analysis was carried out using descriptive statistics such as tables, percentages, and frequencies, and inferential statistics including Chi-square (χ²) test and regression analysis. The findings reveal that Udeagbala Industry Ltd has established credit policies and debt collection procedures, and credit appraisal is conducted prior to granting credit. However, challenges such as late payments, inconsistent policy enforcement, and economic instability affect the effectiveness of credit management. Hypothesis testing confirms that credit management significantly impacts liquidity and profitability, highlighting the critical role of efficient receivables management in sustaining business performance. The study concludes that effective credit management enhances financial stability, reduces bad debts, and improves profitability. Recommendations include strengthening policy enforcement, improving debt collection procedures, providing staff training, and adopting risk mitigation strategies such as credit insurance. The findings provide valuable insights for management, policy makers, and future researchers seeking to improve credit management practices in manufacturing firms.