An Investigation on How to Mitigate Credit Risk Faced by Sa Retailers

Table of contents

List of diagrams (i)

List of figures (i)

CHAPTER 1: PROBLEM STATEMENT AND THE SCOPE

OF THE STUDY

1.1 Introduction 1

1.2 Problem definition 2

1.3 Research objectives 3

1.3.1 Main objective 3

1.3.2 Sub objective 3

1.4 Limitations of the study 3

1.5 Research methodology 3

1.5.1 A literature review 4

1.5.2 Empirical Study 4

1.6 Chapter outlay 4

CHAPTER 2: LITERATURE REVIEW ON CREDIT RISK

2.1 Introduction 5

2.2 Abuse of clients by clothing retail outlets 6

2.3 The importance of Risk Management 7

2.3.1 The importance of Risk Management 7

2.4 Risk management process 8

2.4.1 Risk Identification 8

2.4.2 Risk evaluation and assessment 9

2.4.3 Risk Control 10

2.4.4 Risk Financing 10

2.4.5 Program monitoring and administration 10

2.5 Proactive risk management 11

2.6 Credit policy 11

2.6.1 Credit selection 12

2.6.2 Credit vetting process 12

2.6.3. The application form 13

2.6.4 Credit facility required and granted 13

2.6.5 Account monitoring process 14

2.6.6 The collection process 14

2.7 Conclusion 15

CHAPTER 3: RESEARCH METHODOLOGY

3.1 Introduction 16

3.2 The research method 16

3.3 Sample design 17

3.4 Questionnaire design 17

3.5 Data collection and Response rate 17

CHAPTER 4: ANALYSIS AND INTERPRETATION OF

RESULTS

CHAPTER 5: CONCLUSION AND RECOMMENDATIONS

5.1 Introduction of this study 25

5.2 Conclusion 26

5.3 Recommendations 25

CHAPTER 6: BIBLIOGRAPHY 28

ADDENDUM

List of diagrams

Diagram 1: Risk categorization 9

List of figures

Figure 1: Performance of the two methods 18

Figure 2: Credit offering to customers 19

Figure 3: Rate of growth in the debtor's book 20

Figure 4: Factors considered when deciding on the credit amount to grant 20

Figure 5: Percentage of credit sales vs. total revenue 21

Figure 6: Methods used to verify the information on the application 22

Figure 7: Percentage of respondents that do/do