How to Mitigate Credit Risk for Sa Clothing Retailers

An investigation on how to mitigate credit risks faced by South African clothing retailers By

Nontutuzelo Lydia Mbiyo (3312-655-0)

Submitted in partial fulfillment of the requirement for the degree Hons BCom (Financial Management)

At the University of South Africa

Supervisor: Mrs A.T. Mutezo

ACKNOWLEDGEMENT

Nontutuzelo Lydia Mbiyo, a Bcom Honours student at University of South Africa takes her hat off to those who made and took part in the successful completion of this research study, known and unknown, friends and colleagues, gentle critics, my supervisor Mrs A.T. Mutezo and the whole Unisa community. There are far too many to salute individually, but to all of you, I extend my acknowledgements and appreciation wherever you are. You had a greater part in making this research a success and without your friendly, professional and willing co-operation; this research would not have been possible.

Working on this project, I often felt like a mouse hitching ride from elephants. I have been privileged to stand on the shoulders of giants, far too many to name. I am deeply grateful to Research Department of UNISA for enabling me to find the time and resources to conduct this research and particularly grateful to Edward Masemola of Bureau of Market Research. I am also most grateful to the clothing retailers who assisted in this research by sharing their experience with me and giving up their time to be interviewed for the success of this project.

Thanks to all of you!

DECLARATION
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I declare that “An investigation on how to mitigate risks faced by South African clothing retail outlets” is my own work and all the sources used or quoted have been indicated and acknowledged by means of complete references.

Signature……………… Date…………

Table of

Bibliography: ❖ Loss of income within a time period in which the required profit would have been generated ❖ Loss of potential future earnings from a potentially viable customer through careless credit management (Winterboer, 2004:17). In essence every credit risk determines our appetite for proceeding with or withdrawing from the transaction (Lawlor & Haynes, 2003:15). Credit score- Prediction of negative change (Source: Adapted from Lawlor & Haynes, 2003:16)