credit controls

credit controls

  1. 1the regulation of borrowing from the FINANCIAL SYSTEM as part of MONETARY POLICY. OPEN MARKET

    OPERATIONS are one general means of limiting the expansion of credit. A more selective form of control is consumer INSTALMENT CREDIT regulation (hire urchase). Under this arrangement, the purchase of certain goods is regulated by the authorities stipulating the minimum down-payment and the maximum period of repayment.

  2. the control that a firm exercises over its TRADE DEBTORS in order to ensure that customers pay their DEBTS promptly and to minimize the risk of bad debts. The purpose of credit control is to minimize the funds that a firm has to tie up in debtors, so improving profitability and LIQUIDITY.
See FACTORING, WORKING CAPITAL.
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