The financial stability of banks is crucial if they are to fulfil their role in facilitating transactions between borrowers and lenders. The purpose of this study was to investigate the effect of credit risk on the South African banking industry following a movement in credit ratings by rating agencies. Data from a sample of 11 banks were collected from 2006 to 2015. Econometric regression analysis was used to analyse the data. The results show that inflation, credit ratings, exchange rate, gross domestic product, unemployment rate, capital adequacy ratio and size of the bank are significant factors that determine "non-performing loans". Therefore, it is imperative that banks continuously monitor these factors and adapt their credit policies on "non-performing loans". This action would prepare banks for any adverse effects and ensure that the banking industry remains a sound and efficient contributor to the growth of the South African economy. / Business Management / M. Com. (Business Management)

The study explores pausing in action is, within the ambit of Strategy-as-practice (s-ap) as an emergent school of thought. Pausing is thus discerned during the implementation phase of the strategy of a credit risk system within a South African bank, as strategy is known to take shape during implementation. Different sites of the bank’s systems – change, strategy practitioners, and their times of pausing, form the unit of analysis. Strategy-making and engagement are explored by understanding the influence of pausing on enabling or disenabling the strategic outcome of the risk system. Pausing is situated in an applied and theoretical gap as an intangible under-theorised strategy practice. Practitioners, as champions or non-champions of strategy, pause in various ways, and attribute meaning to this ‘action’. Their account of pausing is recognised for its value-adding or diminishing dimensions to strategy-making. The study follows a comprehensive literature review which shows limited theoretical positions on embodied, latent practices, such as pausing, as strategic practices. The body of knowledge provides a challenge for scholars to consider perceived ‘silences’ or the ‘receding’ of strategists as un-remarked dimensions of strategy, which could nevertheless be instrumental in the nature of the strategic outcome. The contribution of the current study identifies pausing as a strategic practice, especially when considered within the structure of engagement and social learning / Business Management / M. Com. (Business Management)

The objective of this research is to investigate the existence of structural changes in unsecured lending time series data and analyse the impact thereof on trends in consumer demand for unsecured credit spanning the years from 2008 to 2015. This is achieved by identifying dates when structural changes occurred over this period. The identified structural break date is linked to an influential economic event or monetary policy change that took place in South Africa of which the impact on three unsecured credit categories are analysed. Unsecured credit growth in South Africa has been subjected to intensive scrutiny since the inception of the National Credit Act (Act No. 34 of 2005) by various regulatory bodies. In 2012 the National Credit Regulator (NCR) commissioned a research study into examining the impact that the National Credit Act (Act No. 34 of 2005) has had on the consumer credit market. The empirical part of this study involved the gathering of time series data on unsecured loans approved, unsecured credit granted per income category and unsecured credit granted from the National Credit Regulator (NCR) database and performing descriptive and econometric analysis. The Zivot-Andrews (1992) and augmented Dickey-Fuller tests determined the break dates which were linked to a significant economic event while the one sample t-test of means compared average loan values before and after the break date. Results of the study indicate that the break dates determined coincided with economic events and monetary policy changes in South Africa, such as the collapse of African Bank, the implementation of the National Credit Amendment Act, prime interest rate movements and the introduction of a debt counselling program by the government. These events, coupled with stricter lending criteria and no further loans being granted to customers already more than three months in arrears, restrained the uptake of unsecured loans to lower and middle income groups. The introduction of new affordability criteria and increasing interest rates in 2014 further negatively impacted demand for unsecured loans. However, higher income earners had the advantage of being able to apply for higher loan amounts. Findings could be used by monetary policymakers and financial institutions to constantly monitor credit trends, improve credit assessment techniques and review lending criteria. / Business Management / M. Com. (Financial Management)