Research Paper
Year: 2023 | Month: May | Volume: 10 | Issue: 5 | Pages: 130-141
DOI: https://doi.org/10.52403/ijrr.20230517
Debt Management Practices and Financial Performance of Sugar Processing Companies in Kenya (Case Study of Western Region)
Diana Nafula Wanyama1, Dr. Joseph Gichure2
1Masters Student, Jomo Kenyatta University of Agriculture and Technology, Kenya
2Lecturer, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
Corresponding Author: Diana Nafula Wanyama
ABSTRACT
The study sought to determine the effect of debt management practices (client appraisal, credit risk, collection policy, and credit terms) on financial performance of sugar processing companies in Western Region, Kenya. The general objective of this study was to establish how debt management practices affects financial performance of sugar Processing companies. Specifically, the study sought to establish the effect of credit terms on financial performance of sugar processing companies; to determine the effect of client appraisal on financial performance; to evaluate the effect of credit risk control measures on financial performance; to evaluate the effect of credit collection policies on financial performance of sugar processing companies in Kenya. The study was based on the following theories: The 5 C’s Model of Client Appraisal, Theory of the Pecking Order theory and liquidity practice Theory. A descriptive survey design was adopted for the study; the target population will comprise of all managers of the 4 sugar companies in Western Kenya. Data collected through a structured questionnaire. Cronbach (Alpha – α) model used to test the internal consistency while validity ensured by incorporating suggestions from supervisors and expert. Both descriptive and inferential statistics used to analyze the data. Data presentation was done by the use of charts and tables for ease of understanding and interpretation.
Keywords: Debt Management Practices, Financial Performance, Client Appraisal, Credit Risk Control
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