ABSTRACT

This study focuses on the effect of credit management on the performance of listed banks in Nigeria. Sound credit management is a prerequisite for a financial institution’s stability and continuing profitability, while deteriorating credit quality is the most frequent cause ofpoor financial performance and condition. The study made used of an ex-postfacto research design. The data collected were then tabulated and analyzed using the simple regression analysis. The study revealed that credit debt collection has a positive and significant effect on the profit margin. It also revealed that debt ratio has a positive and significant effect on the profit margin. Additional the study revealed that gearing ratio has a positive and significant effect on the profit margin. Itfinally revealed that cashflow has a negative and insignificant effect on the profit margin. Conclusively, Credit management is importantpart infirm financial management decision. The optimal of credit management could be achieved byfirms that manage the trade-offbetween profit margin and liquidity. It is recommended that management should put in place a sound credit management policy that will in effect prevent late payment by debtors and the outcome ofthis may leads to increasedprofitability. It is therefore necessary to apply sound credit debt collection policy to effectively recover lost fund. Managementshould also ensure that debts are paid in time so that thefirm will not be place in financial constraints as its fund will not be loss through bad debts. Through this avenue the profit margin will increased significantly. Finally, credit policy should be in check and should be implemented, as it will lead to credit administration and monitoring which will reduce financial losses and this will also counter bad debts and thefirmprofitability realized