This study was aimed at investigating the high level of consumer indebtedness in the South African retail market more specifically factors that contribute to consumer indebtedness. Recommendations on how to control the level of consumer indebtedness are also presented. Consumer indebtedness is a problem in many countries around the world and as witnessed during the 2008 global financial crisis, its impact can be disastrous. Not only does it create problems for the families but also for a country and even to the extent of the whole world. The literature conducted did not reveal a study undertaken to investigate factors that impact consumer indebtedness. Eight factors were identified and explored further in this study. Results were analysed in chapter three and outcomes presented in chapter four. The method used in conducting this study is the quantitative method. A questionnaire was developed based on the literature review conducted. The questionnaire was a five point Likert scale and was distributed to the respondents in the southern area of Tshwane Municipal district. In view of a manageable number of responses, results were analysed using an excel spreadsheet. Results were verified by an independent expert. From the eight factors that are identified, one (easy access to credit) was found to impact the high level of consumer indebtedness. Although there are other weaknesses, easy access to credit is found to be the main contributor. Recommendations on the findings are presented in chapter five of this study.

A research report submitted to the School of Economics and Business Science, Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment (50%) of the requirements for degree of Master of Commerce in Finance Johannesburg, South Africa May 2016 / The empirical literature provides conflicting assessments about how firms choose their capital structure and how macroeconomic variables influence capital structure decision making. There has been a minimal research of the impact of macroeconomic conditions on the adjustment of capital structure towards target, specifically in the context of South Africa. This study employs a sample of South African companies listed on JSE Limited stock exchange from 2000 - 2014 to investigate: (1) the relationship between corporate leverage and firm characteristics as well as macroeconomic variables; (2) the impact of extreme capital market frictions on capital structure decisions; and (3) the relation between macroeconomic conditions and capital structure adjustment speed using an integrated partial adjustment dynamic capital structure model. The research results find evidence that certain firm characteristics and macroeconomic factors have pronounced influence on the capital structure of the sample of listed companies. The empirical results are compared to previous international evidence from developed markets and are in line with the international evidence. Results show that profitability, size and tangibility are significant determinants of firms’ capital structure in the pre- extreme capital market friction periods. The rand crisis of 2001 – 2002 and the global financial crisis period of 2007 – 2009 are considered extreme capital market friction periods. The findings highlights that profitability and size have a different relation to leverage during these extreme capital market friction periods. The extreme capital market friction dummy is significant which means that capital supply conditions are also amongst important factors that need to be considered while determining the financing mix during periods where the supply of capital is disrupted. The findings highlight that demand-side and supply-side factors need to be considered in firms’ financial decision making processes, especially during periods where there is extreme capital markets friction. The research also finds evidence supporting the prediction of theoretical framework that firms adjust to target leverage slower in good states than in bad states, where states are defined by real GDP growth rate and inflation rate. / MT2017

AFRIKAANS: Die studie ondersoek die verband tussen huishoudingskuld in Suid-Afrika en finale verbruiksbesteding deur huishoudings en daar is bevind dit is 'n wedersydse, moeilik voorspelbare en nie 'n eenvoudige proses nie, omdat verskeie faktore in die ekonomie dit beïnvloed. Die stand van die ekonomie en veral die persepsie van die verbruiker is belangrike faktore. Geld het 'n evolusie ondergaan en minder tasbaar geword as gevolg van krediet. Dit het beheer daarvan moeilik gemaak. Die koste van krediet is 'n geleentheid vir die Sentrale Bank om beheer oor geldskepping uit te oefen. Monetêre beleid skep 'n effektiewe omgewing vir die ekonomie om te funksioneer. Beleid beheer die vraag en aanbod van geld direk (deur rentekoerse) of indirek ( deur vraag- en aanbodfaktore te manipuleer). Geld in die moderne ekonomie verwys na krediet en veral na krediet van huishoudings. Totale uitstaande krediet van huishoudings, en die samestelling daarvan het oor die afgelope 25 jaar aansienlik verander. Dit toon op 'n verandering in die mag van die Sentrale Bank oor die geldskeppingsproses. Bevolkingswelvaart word gemeet aan die vermoë van huishoudings om inkome te bestee. Finale verbruiksbesteding deur huishoudings is die belangrikste deel van totale besteding in die ekonomie. Suid-Afrika klassifiseer finale verbruiksbesteding deur huishoudings volgens die 1993 Stelsel van Nasionale Rekeninge. Verskille tussen die 1993 en 1968 weergawes sluit verskille in ten opsigte van tipe klassifikasie ( doelwit versus duursaamheid) en tussen werklike finale verbruiksbesteding (finale verbruiksbesteding deur huishoudings plus individuele verbruik deur die owerheid) en finale verbruiksbesteding deur huishoudings. Verskillende teorieë bestaan met betrekking tot die effek van rentekoerse, inflasie en finansiële liberalisering op besteding, verbruik oor die lewensiklus, die verbruiksbestedingsfunksie, die verwantskap tussen inkome en besteding en marginale verbruiksbesteding. Die verloop van finale verbruiksbesteding deur huishoudings in Suid¬Afrika oor die afgelope 25 jaar toon dat die samestelling heelwat verander het soos die ekonomie deur verskillende fases gegaan het. Besteding aan duursame en semi-duursame goedere het toenemend gedaal, terwyl besteding aan veral dienste, skerp gestyg het. Die algemene beskikbaarheid van krediet het veroorsaak dat huishoudings al meer op skuld begin leef het gedurende die negentigs. Die gevolgtrekking is dat, in teenstelling met vroeë bevindings, huishoudings nie noodwendig slegs duursame goedere finansier met krediet nie, maar ook nie-duursame goedere en dienste. Die hoë vlakke van krediet en die koste van krediet, het oor die lang termyn 'n negatiewe effek op besteding. Die verband tussen huishoudingskuld in Suid-Afrika en finale verbruiksbesteding deur huishoudings hang af van die faktore wat bestedingsbesluite deur huishoudings beïnvloed, wat monetêre en fiskale beleid insluit. Die toepassing van monetêre beleid werk deur die transmissiemeganisme, wat deur verskeie kanale werk. Die kredietkanaal bestaan uit die balansstaatkanaal en die bankleningskanaal. Die balansstaatkanaal verduidelik die werking van 'n verandering in monetêre beleid op die welvaart van die bevolking. Die bankleningskanaal werk direk deur rentekoerse en banklenings. Verskillende denkskole ondersteun verskillende kanale. Die endogene/eksogene geld vraagstuk lei tot die gevolgtrekking wat gemaak is, dat die voorraad van kredietgeld altyd vraag-bepaald is en dat die aanbod daarvan slegs indirek deur die Sentrale Bank beheer kan word deur die omstandighede in die geldmark (wat rentekoerse affekteer) te verander. ENGLISH: The study investigates the relationship between household debt in South Africa and final consumption expenditure by households and it was found to be an interrelated, difficult process that is not easy to predict, because various factors in the economy influence both. The most important ones are the state of the economy and the perception of the consumer. Money has evolved into something less tangible as a result of credit. That increased the difficulty of control over it. The cost of credit provided an opportunity to the Central Bank to control the creation of money. Monetary policy creates an efficient environment in which the economy can function. Policy control the supply and demand of money directly (through interest rates) or indirectly (through manipulation of the supply and demand factors). Money in the modem economy means credit and specifically credit of households. Total outstanding credit of households and the composition of credit changed dramatically over the last 25 years. This is an indication of a change in the control of the Central Bank over the money creation process. The wealth of the nation is measured by the ability of households to spend income. Final consumption expenditure by households is the most important part of total consumption in the economy. South Africa classifies final consumption expenditure by households according to the 1993 System of National Accounts. Differences between the 1993 and 1968 versions are with respect to type of classification (purpose versus durability) and between actual final consumption and final consumption expenditure by households. There are different theories regarding the effect of interest rates, inflation, financial liberalisation on consumption, consumption over the life-cycle, the consumption function, the relationship between income and consumption and marginal consumption expenditure. The trend in final consumption expenditure by households in South Africa over the last 25 years shows the changes as a result of the different phases of the economy. Consumption of durable and semi-durable goods have decreased continually, while demand for services increased sharply. Households increasingly financed expenditure with credit during the nineties, being the result of the availability of credit. The conclusion is that households not only finance durable goods with credit but also non-durable goods and services, which is contradictory to previous conclusions. The high levels of credit and the cost of credit have a negative effect on consumption over the long term. The relationship between household debt in South Africa and final consumption expenditure is determined by factors that influence decisions about spending, which include monetary and fiscal policy. The influence of monetary policy can be described through the transmission mechanism, that work through different channels. The credit channel consists of the balance sheet channel and the bank lending channel. The balance sheet channel explains the effect of changes in monetary policy on the wealth of the nation. The bank lending channel work through interest rates and bank loans. Different schools of thought support different channels. The exogenous/endogenous money supply debate lead to the conclusion that the supply of credit money is always demand determined and that control by the Central Bank is indirect through the influence of supply and demand conditions in the money market. / Dissertation (MCom (Economics))--University of Pretoria, 2002. / Economics / unrestricted

Presented to the School of Accountancy University of the Witwatersrand, Johannesburg This research report is submitted to the faculty of Commerce, Law and Management in partial fulfilment of the requirements for the Degree of Master of Commerce (specialising in Taxation) Date: 31 March 2016 / This research focuses on large corporate transactions and acknowledges that they play a significant role in the allocation of resources in society. For this reason (1) the composition of firms’ capital structure and (2) how they choose to fund their investments are important. The South African income tax system has a bias towards debt and this bias (1) distorts the financing and investment decisions of firms; and (2) creates international tax arbitrage opportunities. These circumstances are not exclusive to South Africa. In order to address these distortions and loopholes the National Treasury and the SARS Commissioner have introduced complicated interest deduction limitations. This research critically analyses (1) the new adjusted tax rules concerning interest deduction limitations in finance transactions and (2) whether these new rules encourage investment. To assist with this critical analysis we use corporate finance theory to examine debt push-down transactions/structures because these structures are seen as highly tax-efficient for investors (both foreign and local). This research demonstrates that there are many different ways to finance a transaction but ultimately the choice of finance lies along the continuum between the issue of debt or equity. From an economic perspective this research confirms that there is no material reason for the disparate treatment between debt and equity. However from a legal perspective debt and equity instruments are materially distinct and thus tax considerations are influential in selecting the form of finance used in a transaction. This research not only concludes that leverage transactions utilising excessive debt pose a risk to tax revenues, tax sovereignty and tax fairness but also that the artificial statutory treatment of interest deductions on leverage transactions and working capital facilities means that (1) firms’ ability to finance their operations is reduced, (2) the value of firms is reduced and (3) the incentive for investors to invest in South Africa is also reduced. / MT2017

Studies as described in the literature review indicate that most South Africans are highly in debt. The South African Reserve Bank’s quarterly bulletin is one of the prominent barometers for measuring household debt in the country and over the last five years has been indicating a steady decline but still very high household debt among South Africans. Studies have also shown that this relates to poor financial literacy and consumer ignorance in applying basic financial management practices. This is discussed in Chapter two of the study. The aim of the study was to determine the consumer debt level of the Department of Health public servants in Mahikeng, North West Province. This study used a consumer survey to measure consumer indebtedness among public servants in Mahikeng. The results of the study support literature in that the study found that most public servants are indebted. The findings also showed that 63% of the public servants spent more than 20% of their income in servicing debt. Thirteen per cent of the public servants taking part in the study had been served with either garnishee or emolument orders. The results of the study seem to suggest that public servants working for the Department of Health in Mahikeng and taking part in the study were indebted. / Business Management / M. Com. (Business Management)

Studies as described in the literature review indicate that most South Africans are highly in debt. The South African Reserve Bank’s quarterly bulletin is one of the prominent barometers for measuring household debt in the country and over the last five years has been indicating a steady decline but still very high household debt among South Africans. Studies have also shown that this relates to poor financial literacy and consumer ignorance in applying basic financial management practices. This is discussed in Chapter two of the study. The aim of the study was to determine the consumer debt level of the Department of Health public servants in Mahikeng, North West Province. This study used a consumer survey to measure consumer indebtedness among public servants in Mahikeng. The results of the study support literature in that the study found that most public servants are indebted. The findings also showed that 63% of the public servants spent more than 20% of their income in servicing debt. Thirteen per cent of the public servants taking part in the study had been served with either garnishee or emolument orders. The results of the study seem to suggest that public servants working for the Department of Health in Mahikeng and taking part in the study were indebted. / Business Management / M. Com. (Business Management)

This study assessed the link between financial literacy and levels of debt among junior permanent bank employees. Based on the mixed purposive and simple random sampling approach, a structured questionnaire was used to collect primary data from a sample of 275 junior permanent bank employee participants. Frequencies, descriptive statistics and binary logistic regression techniques were applied to analyse data using the SPSS 23 statistical package. The Cronbach’s alpha criterion and Keiser-Meyer-Olkin measure of sampling adequacy results indicate that the research instrument’s items were statistically reliable and statistically valid. The descriptive statistics results on the financial behaviour and attitude dimension indicate that permanent junior bank employees on average pay reasonable attention to their financial affairs. The classification summary statistics indicate that financial literacy and financial behaviour and attitudes were significant predictors of the debt level. The Nagelkerke R-square indicates that some significant amount of overall variation in debt level was accounted for by financial literacy and financial behaviour and attitudes. Based on the odds ratios results, a statistically significant relationship between financial literacy and debt level was found in the study. Conversely, the estimated odds ratios results indicate a statistically significant negative relationship between financial behaviour and attitudes, and the level of debt / Business Management / M.Com. (Business Management)

South Africans carry high debt levels and many deal with the threat of over-indebtedness. In particular, the debt situation of the youth is of utmost concern. This study was undertaken to gain an understanding of how the liability usage of households fluctuates over the life course. The main objective was to identify and describe how debt is accumulated by young South Africans and how household characteristics and events may be related to the uptake of household liabilities. This study conducted a comprehensive literature review culminating with the development of a heuristic model that identified variables that may affect household debt uptake. Quantitative statistical analysis techniques were employed on secondary data acquired from the South African Audience Research Foundation’s All Media and Products Survey for the years 1999 until 2013. The findings identified that household debt follows a familiar life cycle pattern. A number of independent variables were shown to affect household debt uptake. Furthermore, certain of these variables are related to the trajectories of the life course. / Taxation / M. Acc. Sci.