Evaluating the implementation of a municipal credit management policy

Abstract

Background: In South Africa, the growth in the amount owed to municipalities for municipal services rendered, is at an all-time high. The culture of non-payment of rates and taxes for the municipal services is not a new phenomenon. This study is undertaken to determine whether a selected municipality applies its credit management policy to manage the phenomenon of non-payment.

Aim: The study investigated the effectiveness of a municipal credit management policy, from the residents’ perspective, within a municipality in the Sedibeng district.

Methods: Quantitative analysis was applied through a descriptive research design. Primary data were collected from residents through a self-administered questionnaire. The Statistical Package for the Social Sciences (SPSS) (version 28) was applied to perform a descriptive analysis and exploratory factor analysis.

Results: The sampled municipality failed to enforce its credit management policy and was also unable to fulfill its service delivery responsibilities, according to residents’ responses.

Conclusion: This article recommends that a municipality must enforce its credit management policy to generate responsiveness from residents. This can be done through introduction of debt recovery policies and offering discounts for timeous payment. In addition, the municipality needs to improve its service delivery.

Contribution: This article proposes that residents’ responsiveness to the municipal credit management policy is affected by negative attitudes towards the municipality due to poor service delivery as well as challenges with affordability of municipal services.