| dc.description.abstract | The purpose of the study was to establish the relationship between credit policies and Loan
Recovery in Letshego Uganda Limited. The objectives of the study were to establish the existing
credit policies used by Letshego Uganda Limited in loan recovery. To establish the challenges of
managing credit in Letshego Uganda Limited. To establish the relationship between credit
policies and loan recovery in Letshego Uganda Limited.
The study was a cross sectional survey where both qualitative and quantitative data were
gathered in order to establish the relationship between the variables under study. Data was
collected from employees of the credit and loans department and sample size comprised 44
respondents who were purposively selected and simple random sampling was jointly used to
minimize biased results. Self-administered questionnaires were the main instrument of the study
and data was analyzed using frequencies, percentages, regression model and SPSS was used to
establish the relationship between credit policy and loan recovery. The results of this study
indicated that Letshego Uganda Limited used credit standards, credit terms and collection
procedures to manage its debts, costs and benefit implications were also experienced.
The study revealed that credit policies exist in Letshego Uganda Limited but there was
inadequacy in implementing them which negatively impacted on Letshegos loan recovery
between the periods “2009-2011” where the default rate was steadily increasing. It is therefore
this steady rise that necessitates the investigation of its probable cause.
Besides this, there exists a strong positive relationship between credit policy and loan recovery
that’s to say a correlation of 0.028 between credit standards and loan recovery, correlation of
0.199 between credit terms and loan recovery and a correlation of 0.105 between collection
efforts and loan recovery (using correlation SPSS).This implies that the effectiveness of credit
policy leads to higher loan recovery levels.
The researcher recommends that Letshego makes flexible repayment plans for customers
experiencing financial difficulty, and formulate hardship programs for borrowers that are late on
repayment through extension or lowering of payments | en_US |
