Credit management system

Topics: Credit rating, Credit risk, Credit Pages: 31 (8831 words) Published: January 28, 2014


Chapter Three

Project Topic
Exploration of the creditworthiness analysis process in granting post-paid lines to subscribers in the telecommunications industry. A case of Net*One Pvt Ltd.

Table of Contents
Table of Contents1
Chapter One4
1.2 Background of study.5
1.3 Statement of problem.6
1.4 Main Research Question.7
1.5 Research Objectives.7
1.6 Sub- Research Questions7
1.7 Significance of the study.8
1.8 Limitation of study.8
1.9 Summary.9
Chapter Two10
2.0 Introduction10
2.1 Creditworthiness10
2.2 Policy position in credit granting 11
2.2.1 Policy11
2.2.2 Policy Manual11
2.2.3 Credit Policies and Procedures12
2.2.4 Formulation of a credit policy12
2.2.5 Considerations when developing a credit policy12
2.2.6 Importance of Credit Policy13
2.2.7 Credit Period14
2.2.8 Analyzing credit policy15
2.3 Policy implementation of credit granting 16
2.3.1 Credit analysis process16
2.3.2 How to Assess the Credit Worthiness of Customers 16 2.4 Existence of controls on credit granting20
2.4.1 Credit Approval Process 20
2.4.2 Overview of the Credit Approval Process (Oesterreichische National 2009:19)21 2.4.3 Credit Decision — Decision-making Structure22
2.4.4 Credit authority23
2.4.5 Bypassing Hierarchical Layers23
2.5 Review of controls in policy implementation 23
2.5.1 Credit policies and procedures review 24
2.5.2 Process Steps leading up to the Credit Review24
2.5.3 Development & Review Process 25
2.6 Best practice in policy formulation and implementation27 2.6.1 Setting up a good credit control system 27
2.7 Summary30
Chapter Three31
3.0 Introduction31
3.1 Research Design31
3.1.3 Case Study Research design32
3.1.2 Inferential research design33
3.1.1 Descriptive Design 34
3.2 Study population35
3.2.1 Sample size36
3.3 Types/Sources of Data38
3.3.1 Primary source of Data38
Secondary Source of Data39
3.4 Research instruments40
3.4.1 Questionnaire40 Validity of the Questionnaires44 Reliability of the Questionnaires45
3.4.2 Interviews46
3.5 Data Collection Procedures47
3.6 Data presentation47
3.7 Data analysis48
3.8 Summary49

Chapter One
1.1 Introduction

The chapter will look at the project background where the researcher will look at the process of credit worthiness analysis process. It will also look at the statement of problem, purpose of the study, main research question and the research objectives.

1.2Background of study.

Net*One is the first cellular network operator in Zimbabwe based on the Global system for Mobile Communication (GSM). The company among its subscribers has prepaid and post-paid customers. The prepaid subscribers use rechargeable cards to top-up their airtime. Post-paid/ Contract line subscribers make calls in advance and pay at the end of the every month.

The company at the beginning of 2010 it had approximately 500 000 subscribers, until 30 June 2011 it still has the same number of subscribers. Of the 500 000 subscribers that the company has approximately 20 000 subscribers are post-paid subscribers.

The Zimbabwe Independent on the 11th of March 2011 published the speech of the Managing Director of Net*One Pvt Ltd Reward Kangai outlining that, “Net*one’s average annual revenue per customer is US$420 for contract subscribers and US$120 for prepaid customers”. The company has a maximum of US$50 per month for individual.

Jan-Jun 2009
$ 9,999,418.94
$ 1,011,456.56
$ 8,987,962.38
Jul-Dec 2009
$ 11,225,226.87
$ 1,134,834.32
$ 19,078,354.93
Jan-Jun 2010
$ 7,591,091.49
$ 1,279,608.59
$ 25,389,837.83
Jul-Dec 2010
$ 9,852,886.51
$ 3,786,345.78
$ 31,456,378.56
Source: Credit Control Section

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