Assessment of Credit Management.in Case of Dashen Bank Wukiro Branch

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New milliniom University
Collage of Business and Economics
Department Of Accounting and Finance

Assessment of Credit management process: case Study on Dashen Bank Wukro Branch

SENIOR ESSAY SUBMITTED TO THE DEPARTMENT OF ACCOUNTING AND FINANCE FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF B.A DEGREE IN ACCOUNTING AND FINANCE By: HAFTAMU GIDEY

ID. No 174/03

ADVISIOR: HALEMIKIAL TETEMKE

June, 2012
WUKRO

Acknowledgement

First and for most I would like to praise the lord my God for his mercy and all round support throughout my life. Next my greatest debit and intend by heart full gratitude so my advisor H/lmikial tetemke for her correcting her valuable comment on my senior paper preparation

I am highly in deepest to my family specially my brother Haftamu gidey who are helping me in everything to be successful in my academic.

List of table

Table of Contents

Contentspage
Acknowledgement ............................................................................................................ ii List of table....................................................................................................................... Iii Table of content................................................................................................................ IV Chapter one1

1. Introduction1
1.1 Background of the study1
1.2 Background of the Organization2
1.3 Statement of the Problem3
1.4 Hypothesis3
1.5 Objective of the Study4
1.5.1 General Objective of the Study4
1.5.2 Specific Objective of the Study4
1.6 Scope of the Study4
1.7 Limitation of the Study4
1.8 Significance of the study4
CHAPTER TWO6
2. Literature Review6
2.1 Definition of Credit management6
2.2 Process of Credit Management6
2.3 Types of Credit7
2.4 Credit policy variables7
2.4.1 Credit Standard8
2.4.2 Credit analysis8
2.4.3 Credit term9
2.4.4 Collection policy and procedures9
2.5 Credit Information10
2.6 Credit Administration10
2.7 Credit collection and protection11
2.8 Financial assistance11
2.9 Credit Decision11
2.10 Types of bank loans12
2.10.1 Operating loans12
2.10.2 Term Loans13
2.10.3 Interim loan13
2.11 The Cost of loans14
2.11.1 Negotiate interest rates14
2.11.2 The effective interest cost15
2.12 Other source of fund16
2.12.1 Factoring16
2.12.2 Securitization of account receivable16
2.12.3 Leases18
2.13 Managing credit risk19
2.13.1 Screening and monitoring20
2.13.2 Long term customer relationship21
2.13.3 Loan commitments21
2.13.4 Collateral and Compensating balance22
2.13.5 Credit rationing22
CHAPTER THREE24
4. Discussion and analysis24
4.1 Analysis of Questionnaire24
Table 1: sex distributions respondents ................................................................... 24 Table 2 : Age distribution of respondents ............................................................ 25 Table 3: academic qualification of respondents ..................................................... 25 Table 4: Evaluation of credit management system ................................................. 26 Table 5: Supervisor/ manager encourage credit management system .................... 27 Table 6: Information affects customer’s decision .................................................. 27 Table 7: Current relevant recommendation ............................................................. 28 Table 8: Credit policies and procedures ................................................................. 28 Table 9.Do get credit management information usually easily ............................. 29 Table 10: relevant...
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