Credit and Collection Management Practices, Credit Risk Management, and Financial Performance of Private Higher Educational Institutions (HEIs) in the Philippines: Basis for Continuous Improvement

The main goal of an educational institution is to maintain its stability and improve its growth and sustainability. Thus, educational institution must have an effective Credit and Collection Management Practices (CCMP) and Credit Risk Management to avoid credit risk. The study assessed the CCMP of private Higher Educational Institutions (HEIs) as to planning, organization and staffing, leadership, and coordination. It further assessed the CRM of the institutions which were credit and collection policy and credit risk control. Descriptive research design, T-Test, ANOVA, and correlation analysis were utilized in this study. Respondents were the Chief Financial Officers, Controllers, Finance Directors, Finance Managers, and the staff from the Finance Resource Department of the institutions. Results showed that a moderate positive correlation existed between the CCMP as to planning, organization and staffing, leadership and coordination, and the CRM as to the collection policy and credit risk control. Thus, a highly significant relationship implies that the better the CCMP, the better the CRM they employed. Moreover, the computed r-values and the resulted p-values of profitability indicated a moderate positive correlation which means that a significant relationship existed and implied that the better the CCMP, the better the financial performance in terms of profitability would be. Likewise, results showed that a significant relationship between CRM as to the credit risk control, and financial performance as to the profitability, which means that the better the credit risk control applied, the better the performance would be.