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The demand for consumer credit is an area of economics that is of great interest to those in the lending community. While much research has been performed on this topic in the financial industry, the findings have been very closely guarded for competitive reasons. In this study, reduced form equations were derived to form the basis of a 2SLS regression model. This model was used to estimate the demand for consumer credit in the United States over the period 1973 - 2002. Six independent variables were included in the analysis: monetary base, unemployment rate, consumer confidence index, disposable personal income, federal funds interest rate and the price/barrel of oil. The model results concluded that only two of these variables significantly affect the demand for consumer credit – disposable personal income (DPI_t) and the unemployment rate (uet). The error terms were compared against those derived from two alternative models using the same data sets – a trend model and an autoregressive model – AR(1). The root mean square error (RMSE) for the reduced form model was significantly lower then that of the trend model, but slightly higher then the AR(1) model. The objectives of this study are to: (1) produce an accurate model that defines the drivers behind the demand for consumer credit, while (2) producing results consistent with econometric theory. Based on this set of objectives, the reduced form model is the superior of the three models included in this study. / Master of Arts

This diploma thesis analyzes legislation governing consumer credit. In the recent past, a notable development has occurred in this particular area of consumer protection, especially in the field of European legislation. This development has also been reflected in the Czech legal system due to the necessity of transposing European directives. This diploma thesis describes the development of consumer credit legislation at European level starting with Directive 87/102/EHS and also by the Consumer Credit Directive and the Mortgage Credit Directive, which is the last legislative act of the Union legislator in this area and in the domestic legal system starting with Act 321/2001, following with Act 145/2010 and finishing with the current legislation by the Consumer Credit Act. The Consumer Credit Act contains a comprehensive regulation of the activities of providing and mediating consumer credit, regulation of entities operating on the consumer credit market as well as rights and obligations in the provision and mediation of consumer credit. The first chapter defines terms needed to understand consumer credit issues such as consumer, credit and consumer credit terms. The first chapter also contains a basic description of the issue of consumer protection, which, as a legal area, covers all areas of legal...

1 Behaviour of non-bank consumer credit providers in terms of unfair competition Abstract The thesis deals with the issue of providing consumer loans by non-bank providers of consumer loans in terms of the correctness of their actions in selected areas of their activities. The aim of this work is to assess selected typized behaviour of non-bank providers of consumer loans in terms of the possibility of committing (both) unfair commercial practices and unfair competition. The author thus examines the behaviour of these entities in connection with their information duty and the duty to assess creditworthiness of consumers. In the area of information duty, it focuses more on the pre-contractual information obligation for non-bank consumer credit providers and the obligation for these entities to inform consumers of the annual percentage rate of charge. The subject of the thesis is also an assessment of possible concurrent responsibility of non-bank providers of consumer credit for committing unfair commercial practices and unfair competition. The sanctions provided for by the Consumer Credit Act are also taken into account. The author also describes the development of legislation in defined areas, where the work includes a comparison of current and previous legislation on consumer credit. The thesis contains...

Research report to SBL, Unisa, Midrand. / Credit risk has been identified as the main risk that can result in the failure of a bank due to ineffective credit decisions. It is, therefore, critical for the banks to conduct credit risk assessment on new applicants and existing customers in order to determine the level of affordability and mitigate credit risk. Consumer credit information plays a very important role in credit risk assessment because it can accurately detect and predict default. The aim of this study was to investigate the consequences of inaccurate credit information on bank’s secured lending division. The investigation was conducted using various methods to achieve the objectives of this research. This was done through the exploration of literature review relating to research of the management of consumers credit information in developed and developing countries, and secured lending and inaccurate credit data. A quantitative research methodology was adopted. It was observed that credit risk is seen as the key risk that banks are faced with. It was found that inaccurate consumer credit data can have a negative impact on bank’s operations in terms of consumer’s disputes, higher pricing and consumer overindebtedness. In addition, inaccurate consumer credit data impede access to credit by consumers. One of the general recommendations of this research is that banks should assist in training the consumers to improve their knowledge of credit report. Further studies in the area of corporate or business clients are also recommended as the focus of this research was on individual bank’s clients.

Research report to SBL, Unisa, Midrand. / Credit risk has been identified as the main risk that can result in the failure of a bank due to ineffective credit decisions. It is, therefore, critical for the banks to conduct credit risk assessment on new applicants and existing customers in order to determine the level of affordability and mitigate credit risk. Consumer credit information plays a very important role in credit risk assessment because it can accurately detect and predict default. The aim of this study was to investigate the consequences of inaccurate credit information on bank’s secured lending division. The investigation was conducted using various methods to achieve the objectives of this research. This was done through the exploration of literature review relating to research of the management of consumers credit information in developed and developing countries, and secured lending and inaccurate credit data. A quantitative research methodology was adopted. It was observed that credit risk is seen as the key risk that banks are faced with. It was found that inaccurate consumer credit data can have a negative impact on bank’s operations in terms of consumer’s disputes, higher pricing and consumer overindebtedness. In addition, inaccurate consumer credit data impede access to credit by consumers. One of the general recommendations of this research is that banks should assist in training the consumers to improve their knowledge of credit report. Further studies in the area of corporate or business clients are also recommended as the focus of this research was on individual bank’s clients.

The Consumer Loan Contract and its Securing by Suretyship As is self-evident from the title of the thesis, the subject matter of the thesis is the analysis of the concept of consumer credit and the securing thereof through suretyship. The starting point of the thesis was the newly-adopted Consumer Credit Act, which came into force on 1 January 2012. The aim of this thesis is to acquaint its readers with the relevant legislation, point out its shortcomings, and analyse the concept of suretyship as the most typical instrument used to secure consumer credit obligations, thus giving the reader a full picture of these legal concepts. The thesis is divided into nine chapters. The first chapter describes a contractual relationship under the credit contract, which is governed by legal regulations similar to those governing a consumer credit contract or a loan contract. This chapter analyses the essential terms of a credit contract, its origination and termination. Also analysed are the differences between a credit contract and a loan contract under the Civil Code. The second chapter describes the history of the consumer credit concept, in both domestic and European contexts. Particular emphasis is given to the individual directives of the European Community, currently the European Union, since they are of...

of the Thesis: "Consumer loans - elements, selected clauses in consumer loan contracts, the protection of a consumer" The aim of this thesis is to describe in which ways laws regulating consumer credit effect praxis and contract provisions and how the praxis uses the limits given by the law. Author focuses on customer protection, law provisions, which should protect him and equalize his weaker position and state institutions, which control following this law provisions and administrative procedure in case of infringement of this law provisions. The thesis consists of four chapters. In the first chapter the author concentrates on economic factors of consumer credits and basic definitions of consumer credits. Second chapter is on the subject of law regulation. It is about general law regulation in civil code and new civil code and about specific law regulation in the statute of consumer credit. The law regulation in the statute of consumer credit is divided into 13 part- development of specific statutes on the subject of consumer credit, chronological succession, force, amendment, and discretion about consumer's ability to repay the loan, withdraw, notice, credit for buying goods, prepaying, agents, control and administrative offence, change of trade statute. Law provisions are commented and bound to...

A research project submitted to Wits Business School in partial fulfilment of the requirements for the degree of Master of Management in Finance & Investment February 2016 / South Africa has one of the highest income inequalities in the world. Although evidence suggests that access to secured credit has a positive impact on improving individuals’ earnings and reducing income inequality, secure credit has not been readily available to everyone in South Africa owing to past injustice of apartheid. This provided a business opportunity to credit providers who rolled out numerous unsecured lending financial products into the market. These are products historically target middle to low-income earners who don’t qualify for secured loans due to lack of collateral or good credit history. Small and Medium Enterprises (SMEs) also resort to these products when financial institutions don’t grant them secured loans because of their imbedded risky nature. Capitec Bank and African Bank are the biggest players in the South African unsecured lending market. During the 2008 worldwide economic and financial crisis, many people lost their jobs in South Africa. The impact of the crisis continued to be felt way after the modest recovery achieved globally and domestically. As a result, most individuals could no longer afford mortgages and basic needs and services because of their compromised economic situation. Henceforth majority of individuals resorted to alternative income means for their survival. For most individual, unsecured lending was viewed as the quickest way of securing additional income to supplement their minimal or no income. This resulted in exponential countrywide growth in unsecured loans. As unsecured lending attract a higher interest rate than secured loans, other formal banking institutions have been attracted to this market resulting in compounded overall growth of the loan book. This research paper aims to explore the unsecured lending landscape in South Africa with the intension of discovering how it has evolved over the years. It also explores whether unsecured lending has been a helping tool to the less fortunate through its impact on their subjective wellbeing. The findings of the research indicated that individuals with unsecured loans have a lower subjective view of their personal wellbeing when compared to those without unsecured loans. However, unsecured loans improve individuals’ personal wellbeing through its direct effect on individuals’ health, educational status and income. / GR2018