This research titled, ‘the effects of management of accounts receivables on the performance of public corporation” was aimed at finding out all the factors that affect the level of receivable of public corporation reasons behind the huge amount of debts being owed this corporation and most importantly how the combine effects of these factors affect their performances generally. This in line with the reasoning that the issue of the receivables and the problems usually arising from its poor management does not in any way exclude public corporation since most of them as well provide services on credit. The research itself was designed to be descriptive, consequently, the survey research approach was adopted. Based on this public corporation the National Electric Power Authority (NEPA) were randomly selected as the sample. The sample size consisted of two hundred and ninety persons chosen from the three hundred customers to whom questionnaire were administered and also one hundred and twelve persons chosen from the one hundred and twenty employees of the sample co-operation to whom questionnaires were administered also in addition two different sets of questionnaire were designed for this study. While one as administered to the customers of the sample corporation, the other was administered to the employees. Subsequently, information collected wee analyzed using tables and simple percentage. Additionally, the chi-square dist and co-efficient of correlation were used in testing the hypothesis formulated in order to prove or disprove them after which the findings from the study were summarized and conclusions drawn from them. The study showed that such factors as, the rates being charged for this corporations’ services the billing system the general economic situation in the country and the working conditions of the staff are some of the factors that influence receivables of public corporation. It was further discovered that inefficient management of receivables by public corporation directly and indirectly lead to such problems as illiquidity, irregular payment of workers salaries and other entitlements, employees less of motivation and high labour turnover all of which affects the per of public corporation negatively. However, in view of the findings made from the study and conclusion drawn there from that how public corporation manage their receivables grossly affect their performance either directly or indirectly in the forms mentioned above, some recommendations were made in chapter five of this report and it is hoped that these recommendations are adhere to, there will be significant and justifiable improvements directly on their performances most especially in Enugu district and then the nation as a whole.





Ordinary, the significance of granting trade credit by firms and organisations in current day activities in Nigeria cannot be over-stressed. This is because trade credit acts as an indispensable marketing device providing the easier ‘bridge’ through which goods and services are conveyed from the producers through the wholesaler and retailers to the consumers.

This granting of credit to customers through mostly used by commercial/private enterprise is in no way restricted to them alone as it is also used extensively by public corporations of these public corporations in National Electric Power Authority (NEPA), the Nigeria Telecommunications Plc (NITEL),  Water corporation etc. The reasons these public corporations also grant credit to their customers are not too far to fetch, the first being that it gives them the advantages of billing their customers for services provided to them based on actual consumption rather than on mere estimates. The import of this is corporations are saved the trouble of petitions, protest and even legal actions that would have taken much of their time and money too.

The second reason being for these public corporations to take full advantages of the economics of scale since for them to have insisted on cash payment the point of consumption would have been undisputedly led to avoidable lower sales being recorded. Also, insisting on cash-based transactions would have amounted to putting themselves at a very disadvantages position as they would have lost most of their customers to other competitors or even to substitutes being produced in large quantities all over the country. National Electric Power Authority (NEPA) for instance, people would have gone for generators, rechargeable laterns lamp etc in place of service provided by NEPA.

These in no doubt would have led to diseconomies of scale and its apparently consideration of all these that most public corporations in Nigeria seem to have consistently over-looked  or even ignored adopting payment on cash basis as the solution to their numerous financial problems as being touted by some people. However there is a problem usually associated with trade credit and that is, how to management it to avoid creating problems for the business vis-à-vis its per. For instance, from the financial reports of public corporation like NEPA, it could be virility be seen that receivables make up a larger portion of their current asset figure and this not without its attendant problem recovery risk. NEPA for instance has recently been battling with the over increasing debt (over N5b) owed to it by various calibers of consumers nationwide.

These have been the bane that public corporations especially NEPA in their quest to provide qualitative and unbearable service to entire populace and hence, the need to appraise their performances vis-a-vis the management of their book debts.


Long over the years, there has been a general and widespread agitation by the Nigerian populace for efficient performance by public corporations most especially those of them that have a direct and equally noticeable impact on their lives like the National Electric Power Authority, (NEPA). Agreed that this corporation have to provide essential service even on credit basis to the citizenry just to make up, it is disheartening to note that it has instead ended up accumulating a huge amount of debt apparently more huge than it could management effectively. For instance, NEPA alone is being owed to the turnover N5b as reported in the fourth page of business times of 16th February 1999. This can be appreciated if it is realized that this amount being owned NEPA is greater than even the entire budgetary allocation to the power and steel sub sector.

Though public corporations are generally believed to be engaged in the production essential goods and services to the entire populace at relatively low prices, it should be noted that for this function to be performed creditably, adequate provision of tools, equipment and other necessary material have to be made in addition to a sound management team. Howe very, with the usually so noticeable financial constrains, these never materialize that easily as efficiency no doubt, is most times faceable to availability and good management of funds. Availability of fund here is a necessity. Therefore there is no gain saying the fact that the gigantic debt being owed NEPA has had a rather adverse on its performance generally as this corporation among other problem have found it extremely difficult replacing broken – down strategic facilities used for the generation, transmission and proper distribution in NEPA due to lack of funds and this has in a way crippled the effort of this corporation towards making greater impact on the lives of generality of the populace.

In view of the foregoing, the researcher intends to find out.

a.  Whether exogenous factors may be responsible for the level of accounts receivables of public corporations.

b.  Whether exogenous factor may be responsible for the level of accounts receivables of public corporations.       

c.  Whether the level of accounts receivables will influence the performance of public corporation.


The main task this research work set out to accomplish can be articulated as follows: 

a.  To find out how exogenous factor influence the level of accounts receivables of public corporations.

b.  To determine how endogenous factor influence the level of accounts receivables of public corporation.

c.  To identify the relationship between the management of account receivables and the performance of public corporation.   

d.  To recommend workable solutions that will alleviate the problem of debt arising from account receivable being encountered by public corporation.


The result of this would be of primary importance to public corporation since the management are interested in preferring solutions to reduce if not entirely eliminate the huge amount of book detor as a result of credit granted to customers. Specially, it will highlight the importance of good management of receivable to the survival, growth and efficient performances of public corporation.

It will also highlight even for these involved in formulation and implementation of credit policies in private enterprise, the adverse effects of an inefficient management of trade credit on the performance of this companies and conversely, the benefits to be derived from proper management.

For the general public, this study will show the importance of consume interest and awareness in the performance of public corporation as it will create an awareness on the obligation that consumers owe to the survival of public corporation. This no doubt will for ters the ideal producer consumer relationship which is newspaper for growth and efficiency of this corporation.

Lastly the research will serve as a reference material that will aid financial managers in credit management as well as providing a valuable source of information for future researcher.


The following hypothesis stated in null form will be tested in this study.

1.  Exogenous factor have no relationship with the level of accounts receivable of public corporation.

2.  Endogenous factor have no relationship with the level of account receivable of public corporation.

3.  Poor management of account receivable and efficient performance of public corporation are directly correlated.


This research cover the credit management policy and practice of NEPA but for obvious reasons with particular reference to Enugu district. However it did not cover such aspect of total account receivable, as prepaid expanses, loans and advances to staff, etc but rather was restricted to the customers accounts payable being this corporation receivable.

There are some noticeable constraint on the course of study for most of them being the unavailability  of current annual report of the public corporation studied. In NEPA the researcher used the annual report of 1993 and 1994.

In addition as a result of limited number of literature  on this topic, only works by certain authors were taken into consideration in the review of related literature.

Lastly, the researcher decided to study only a small sample from the large populace of public corporation because of the very short time available for the study in addition to the monetary consideration.


Trade Credit: This refers to the selling of goods and services to customers on the condition that they pay later.

Accounts receivables: This is an amount of money to be received from customers in payment for goods and services provided to them on credit exogenous factors. Factors operating outside an organisation but affecting it within.

Endogenous factors: Internal factor that affect an organisation.

Public corporation: Any government owed company which as corporate entity.

Credit policy: The criterion on the amount of credit to be given out is based.

Credit standards: These are steps taken to analyze credit applicants in order to known which of them that qualities to be given credit and the extent of the credit.

Collection policy: The decision variable that influences when and how trade credit given is to be collected.

Billings: The computation of total amount payable by a consumer for the units of electricity consumed.

Metering: This refers to the way in which the units/amount of electricity consumed is determined.

Liquidity: The ease and speed which current asset are turned into cash, enough to meet current liabilities.

Bad debts: Specific debt classified to be uncollectible in whole or in part either because the creditors finds it impracticable to enforce or the debtors can no longer pay.