Chapter One — 1.1 Background to the Study

In recent years, Working Capital Management has emerged as a critical factor shaping customer retention across organizations operating in and around Enugu State. As institutions grapple with the pressures of globalization, regulatory reform, and shifting stakeholder expectations, understanding how working capital management relates to customer retention has become an important area of both scholarly and practical concern.

Within the context of Enugu State, this relationship carries particular significance. Organizations in this setting operate under a distinct combination of economic, regulatory, and market conditions that may amplify or dampen the effect of working capital management on customer retention, making a context-specific inquiry both timely and necessary.

1.2 Statement of the Problem

While working capital management is widely discussed in policy and industry circles, empirical evidence on its actual effect on customer retention within Enugu State remains sparse and, in places, contradictory. This lack of localized, rigorous evidence makes it difficult for decision-makers to know with confidence whether current approaches to working capital management are helping or hindering customer retention — a gap this study sets out to close.

1.3 Objectives of the Study

1. To examine the effect of Working Capital Management on customer retention in Enugu State.
2. To assess the extent to which working capital management influences customer retention within the study area.
3. To identify the challenges associated with working capital management in relation to customer retention.
4. To recommend strategies for optimizing working capital management in order to improve customer retention.

1.4 Research Questions

1. What is the effect of working capital management on customer retention in Enugu State?
2. To what extent does working capital management influence customer retention within the study area?
3. What challenges are associated with working capital management in relation to customer retention?
4. What strategies can be adopted to optimize working capital management in order to improve customer retention?

1.5 Significance of the Study

Beyond its academic contribution to the field of finance / banking, this study has practical value for management teams within Enugu State seeking to understand how working capital management translates into measurable outcomes around customer retention. It is equally useful to students and future researchers looking for a localized empirical reference on this relationship.

1.6 Scope of the Study

In terms of scope, this study confines itself to Enugu State, focusing specifically on how working capital management relates to customer retention within that setting. Findings are interpreted within these boundaries rather than as universal claims applicable to every organization or market.