The effect of credit management policy on performance of logistics companies in Uganda

Abstract

This study assessed the effect of credit management policy on the performance of logistics companies in Uganda using Bollore Africa Logistics (U) Limited as a case study. The objectives were to establish; the relationship between the contractual and commercial credit policies and performance of Logistic firms in Uganda; the effects of credit collection policy on the performance indicators; and finally to look at the extent to which the dispute and provision credit policy affects performance of Bollore Africa (U) logistics. A cross sectional case study design was used. A mixed approach of both qualitative and quantitative was adopted. The study population of 40personnel utilized 36 of these respondents for the study. Simple random sampling technique was used to select the participants from the class of 8 heads of departments and the 26members of the finance department. Purposive selection technique was used to select respondents from the top management and census for the credit control team. Quantitative data analysis mainly consisted of descriptive statistics which were mainly frequencies and percentages and inferential statistics which included spearman correlation, coefficients of determination and regression. Qualitative data analysis involved content analysis which was used to edit qualitative data obtained from the documentary guides and reorganized it into meaningful shorter sentences. Findings revealed a moderate positive effect of contractual and commercial credit policy on performance with an account of 23% impacts on performance, credit collection policy portrayed a weak positive effect on performance with 15% impact and lastly the dispute and provision credit policy with 39% established a strong positive effect on performance. Based on the above findings it can be concluded that credit control management plays a pivotal role in the performance of logistic firms and the study recommends that logistic firms should lay focus on division of tasks between departments in relation to management of credit policies, second, information should be circulated both vertically and horizontally to relevant stakeholders and finally business document verification at all points of engagement should be prioritized.