Credit Management and Profitability Growth in Nigerian Manufacturing Firms

Gideon Tayo Akinleye () and Olusola Olawale Olarewaju ()
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Gideon Tayo Akinleye: Ekiti State University
Olusola Olawale Olarewaju: Ekiti State University

Acta Universitatis Danubius. OEconomica, 2019, issue 15(2), 445-456

Abstract: Aim: This study aims to examine the effect of credit management on the profitability growth of manufacturing firms in Nigeria from 2007 to 2016. Methodology: Panel data regression technique was used. Result: the study reveals that cash conversion cycle and collection period were positively related with the manufacturing firms growth and a negative relationship was discovered between the payment period. Also, the manufacturing firms’ growth credit management positively influenced the growth of Dangote Cement Plc, Guinness Nigeria Plc and Nestle Plc while, the adopted credit management hindered the growth of Cadbury Plc and Leventis Plc. Conclusion: The study concludes that the non-compliance of the manufacturing firms to credit management had hampered their growth and sustainability; the cash conversion cycle had great influence thereby enhanced the growth of manufacturing firms in Nigeria. Recommendation: The study recommends that manufacturing firms should establish and continuously update their credit policies that clearly outlined the management’s view of the organization growth priorities; the manufacturing firms should engaged competent and qualified personnel in other to ensure optimal decision and enshrined strict adherence to collection and payment period.

Keywords: Credit management; Manufacturing firms; Growth; Profitability; Panel data regression (search for similar items in EconPapers)
Date: 2019
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