dc.contributor.author | Kitaka, Johannes M | |
dc.date.accessioned | 2013-05-11T11:40:36Z | |
dc.date.available | 2013-05-11T11:40:36Z | |
dc.date.issued | 2006 | |
dc.identifier.citation | Masters thesis University of Nairobi (2006) | en |
dc.identifier.uri | http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/22033 | |
dc.description | Degree of Master of Business Administration | en |
dc.description.abstract | This study was done to determine the reasons as to why trade credit was extended to
General Motors East Africa Ltd by its suppliers of materials, to her customers, dealers
and distributors. To understand whether there existed a formal process that General
Motors East Africa Ltd followed in assessing each customer for trade credit capacity
and finally the application of trade credit funds to those who received them.
Data was collected through a drop and pick questionnaire. Interviews of critical people
who were involved in credit management in each of the organizations were conducted.
The credit policies were also examined. The data was analyzed using SPSS at zero
correlation done at 0.05 significant levels.
The study concluded that trade credit was offered where bank credit was unavailable
or limited and very expensive. It was used to match production life cycles, to match
customer demands. All the respondents indicated the existence of trade credit policies
and 85% of them had been reviewed in the last one year and the balance was current
at time of the study. 71% of the respondents indicated that trade credit had been
extended in some instances due to management influence. This brought moral hazard
in the trade credit practice and may explain why there was a high level of bad debts
provisions and write offs. Racial and tribal bias in the allocation of dealerships and
distributors was noted as a basis for granting of trade credit.
Most firms have written down trade credit policies a formal way of credit risk evaluation
and risk ranking. The legal framework was said to be slow and ineffective. The results
from this study therefore supported the transactions, costs and financial theories of
trade credit and that the production cycle can influence the use trade credit especially
where it is used for purchases | en |
dc.language.iso | en | en |
dc.publisher | University of Nairobi. | en |
dc.title | Trade Credit As A Source Of Finance For The Motor Sector In Kenya: The Case Of General Motors East Africa Limited And Her Distributors | en |
dc.type | Thesis | en |
local.publisher | Faculty of Commerce | en |