Thesis (MBA (Business Management))--University of Stellenbosch, 2010. / ENGLISH ABSTRACT: The National Credit Act came into being on the 1st of June 2007 and besides its other objectives was intended to make credit more accessible to all South Africans, to stop unreasonable practices by lenders and to protect consumers against reckless lending. This research study investigates the credit environment for the period since the implementation of the Act up to the fourth quarter of 2009 to determine whether South African credit users are indeed better off or whether we are heading for a credit crisis. A literature review was conducted to investigate the extension of credit to households during the period under review and to investigate consumers’ ability and willingness to repay their debt. Due to the global and local financial crisis that happened during this period and the losses and wealth destruction that ensued, the research was extended to consider the influence of the macroeconomic situation on the debtors’ ability to honour their debt commitments. To determine whether South African households are heading for a credit crisis the researcher reviewed literature relating to the financial vulnerability of households, the application of their monthly disposable income, the main reasons for entering into credit agreements, and lastly the extent of over indebtedness. The findings indicate that credit has indeed become more accessible to all South Africans as the number of credit active consumers continued to increase from quarter to quarter. With regards to the cost of credit and the minimum qualifying criteria, credit also became more accessible as individuals earning as little as R1 500 per month became eligible for credit and store cards that used to be exclusive to higher income earners. During the period under review the standing of credit active consumers continued to deteriorate with only 54% of credit active users classified as current at the end of the period, almost 10% lower than before the implementation of the act. It was also found that macroeconomic influences from around the world had a real influence on the ability of credit active consumers to honour their financial commitments. Increased interest rates, inflation, higher transport and energy costs, unemployment and many other factors influenced the income available for and the ability to repay debt over the period under review. Lastly it was found that households are increasingly vulnerable to any changes in their income, expenses, savings or debt position. It is increasing to such an extent that more than 50% of all credit active consumers surveyed during a previous study admitted to borrowing in order to re-pay debt and that a relatively large percentage of users are committed to debt repayments for more than 100% of their monthly income. These findings support the opinion that a credit crisis is on the loom in the South African credit industry. Due to the relatively short period covered by the research stretches and the multitude of income groups and credit agreements included, more research is needed to make specific recommendations to improve the position of credit active consumers. The challenges facing the industry are further complicated by the need credit and other needs of the lower income earners, the required price-for-risk-policies of credit providers and the low levels of financial education amongst users. All three these themes require more research. / AFRIKAANSE OPSOMMING: Die Nasionale Kredietwet wat op 1 Junie 2007 in werking getree het het onder meer ten doel gehad om krediet meer toeganklik te maak vir alle Suid Afrikaners, om onbillike praktyke deur krediegewers stop te sit en om gebruikers te beskerm teen roekelose kredietverlening. Hierdie navorsing verken die kredietomgewing vir die tydperk sedert inwerkingtreding van die wet tot en met vierde kwartaal van 2009 ten einde vas te stel of Suid Afrikaanse gebruikers inderdaad beter daaraan toe is, en of ons afstuur op n krediet krisis. ‘n Literatuurstudie is onderneem om die toestaan van die verskillende tipes huishoudelike krediet tydens hierdie termyn te ondersoek, sowel as die gebruikers daarvan se gewilligheid en vermoë om hul maandelikse skuldverpligtinge na te kom. Vanwee die ernstige finansiële krisis wat tydens hierdie periode in die wêreld en in Suid Afrika grootskaalse verliese en welvaartsvernietiging tot gevolg gehad het, is die literatuurstudie uitgebrei om ook oorweging te gee aan die invloed van hierdie gebeure op skuldenaars se vermoë om hul skuldverpligtinge te diens. Ten einde vas te stel of Suid Afrikaanse huishoudings afstuur op ‘n kredietkrisis het die navorser literatuur bestudeer rakende die finansiële kwesbaarheid al dan nie van huishoudings, die aanwending van hul beskikbare inkomste, die redes vir huishoudings om geld te leen en laastens die omvang van gebruikers wat meer veskuldig is as wat hulle kan bekostig. Die bevindinge dui daarop dat krediet weliswaar meer toeganklik is vir alle Suid Afrikaners aangesien die aantal krediet gebruikers gedurende die tydperk van kwartaal tot kwartaal gegroei het. Wat betref die koste daarvan en die minimum vereistes daarvoor het krediet ook meer toeganklik geword, en kwalifiseer individue wat so min as R1 500 per maand verdien nou vir kreditkaarte en winkel krediet wat voorheen net beskore was vir die hoër inkomste groepe. Tydens hierdie periode het die status van kredietgebruikers verder verswak en het die persentasie kredietgebruikers wat op datum is met hul verpligtinge so laag as 54% gedaal; bykans 10% minder as voor die inwerkingtreding van die wet. Daar is verder bevind dat makro ekonomiese toestande in die res van die wêreld en Suid Afrika ‘n daadwerklike invloed het op die vermoë van kredietgebruikers om hul skuldverpligtinge na te kom. Stygende rentekoerse, inflasie, duurder vervoer en energiekoste, werkloosheid en vele ander faktore het die kontant beskikbaar vir en die vermoë om skuld te delg baie nadelig geraak oor heirdie tydperk. Laastens is bevind dat huishoudings toenemend kwesbaar is vir enige veranderinge in hul inkomste, uitgawe, spaar of skuld verpligtinge. Soveel-so dat meer as 50% van alle gebruikers van krediet erken dat hulle by tye geld geleen het om ander skuld te betaal, en dat ‘n beduidelnde persentasie gebruikers tot meer as 100% van hul besteebare inkomste verbind is vir maandelikse terugbetalings. Bogenoemde bevindinge ondersteun die opinie dat daar n dreigende krisis in die Suid Afrikaanse kredietomgewing is. Aangesien hierdie navorsing beperk is tot ‘n relatiewe kort termyn en dit ‘n groot spektum van inkomstegroepe en kredietooreenkomste dek, is verdere navorsing nodig om spesifieke aanbevelings te maak ten einde Suid Afrikaanse kredietgebruikers in ‘n beter posisie te plaas. Die uitdagings in die industrie word verder gekompliseer deur die krediet en ander behoeftes van laer inkomstegroepe, die noodsaaklikheid vir uitleners om hul produkte te prys vir die inherente risikos wat daaraan gebonde is en die lae vlak van finansiële opleiding onder gebruikers. Al drie hierdie temas benodig verdere navorsing.

Thesis (MDF)--Stellenbosch University, 2015. / ENGLISH ABSTRACT: South Africa has experienced a significant growth in household unsecured credit extension, igniting concerns around the potential negative impact of household indebtedness on the stability of the banking system. With the use of correlation and ordinary least squares, the study attempts to prove a relationship between growth in unsecured lending (dependent variable) and consumption, lending rates and de-regulation (independent variables). Although there is a correlation between growth in unsecured lending and interest rates, this was not statistically significant. The study also found a strong relationship between unsecured lending and the other independent variables. Due to income and wealth inequality exacerbated by the past political dispensations as well as continued rise in the cost of living, unsecured lending provides a source of supplementary income that allow households to smooth their consumption expenditure over their life-cycle. On a longerterm basis, the country needs to gear itself to focus primarily on channelling resources towards productive investments. Quality education and skills as well as a culture of entrepreneurship and wealth creation should be cultivated at a young age.

published_or_final_version / Computer Science and Information Systems / Master / Master of Philosophy

The Insolvency Act 24 of 1936 regulates the debtor’s estate when sequestrated for the benefit of creditors. The debtor must prove that sequestration will be to the advantage creditors and as such creates a stumbling block in the way of the debtor when applying for the voluntary surrender of his estate. Sequestration is viewed as a drastic measure due to the consequences attached to it. The sequestration procedure is often used by debtors as a form of debt relief as, subsequent to the sequestration procedure, the debtor may become rehabilitated. The effect of rehabilitation is that it discharges the debtor of all pre-existing debts and disabilities resulting from sequestration. Compulsory sequestration is often used as a debt relief measure by the debtor in the form of the so-called ‘friendly sequestration’. One of the reasons for this is that the onus of proof is much less burdensome as compared to the onus required in voluntary surrender by the debtor of his estate. South African law provides for alternative debt relief measures falling outside the scope of the Insolvency Act, including debt rearrangement in terms of section 86(7)(b) or debt restructuring in terms of section 86(7)(c) as a result of debt review in terms of the National Credit Act 34 of 2005 (NCA). However this procedure does not offer the debtor the opportunity of any discharge from his debts as the order expires only after the administration costs and all of the listed creditors have been paid in full. Further the NCA does not mention the Insolvency Act and this has led to problems in the application of both Acts and inconsistencies between them. An application for debt review by the debtor has been held to constitute an act of insolvency. Thus the creditor can use this very act of the debtor to have the debtor’s estate sequestrated. This is possible as an application for the sequestration of the debtor’s estate is not considered to be an enforcement of a debt by legal proceedings for the purposes of section 88(3) of the NCA and such actions by the creditor are not prohibited by the NCA. This was stated in Investec Bank Ltd v Mutemeri 2010 (1) SA 265 (GSJ) and was subsequently confirmed by Naidoo v ABSA Bank 2010 (4) SA 597. The consequence of this is that a debtor’s estate may be sequestrated even where he has applied for debt review. Currently, as stated by Van Heerden and Boraine, there is no explicit regulation by the legislature of the interaction between the provisions of theInsolvency Act and the NCA. In terms of FirstRand Bank v Evans 2011 (4) SA 597 (KZD) a debtor’s estate may be sequestrated even after a debt rearrangement order has been confirmed by a court in terms of the NCA. This clearly operates to the disadvantage of a debtor. Comparing the position with that in foreign jurisdictions such as the United States of America and England and Wales shows a lack of balance between the interests of the creditor and the debtor. South African insolvency law is not aligned with internationally acceptable standards because it is too creditor orientated and debtors are not provided with effective remedies to deal with their financial difficulties. This research paper will focus on reform in South African law to assist debtors in need of debt relief. There is a need for a system to be put into place to regulate application for debt review by a debtor and the application for the sequestration of the debtor’s estate by the creditor. In addition there is a need for the introduction of new legislation or amendment to the NCA which could be effective in redressing the current situation. / Thesis (LL.M.)-University of KwaZulu-Natal, Durban, 2013.

Legal regulation of consumer credit in the Czech republic Abstract This diploma thesis deals with the topic of consumer credit distribution in the Czech Republic. Recently, the European level of regulation of the provision and intermediation of consumer credit has undergone a major change. In connection with that also individual Member States had to transpose the revolutionary Directive 2014/17/EU which extends consumer protection to loans concerning real estate. This was executed in the Czech Republic by the adoption of the Act No. 257/2016 Sb., which came into effect on 1 December 2016. The paper is divided into four parts, in which the author describes and evaluates the current state of consumer credit distribution regulation. For this purpose, the provisions of the Act and their interpretation using accompanying documents are subject to analysis and evaluation of their conformity with the objectives of the regulation. The first part describes the historical context and development of consumer credit from the beginnings of the western civilization to the present state, focusing on the European Union as the originator of our national consumer credit legislation. The second part is devoted to general aspects of consumer credit provision, especially the scope of the Consumer Credit Act and other general...

Thesis (M.M. (Research))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Governance, 2016. / Most economies today are calling upon their or rather are starting to rely on their Small and Medium business Enterprises to stimulate the economy and also help address issues of unemployment. However it is also believed that even though this maybe the case, most economies still don’t give SMEs enough funding. The underlying public assumption is that all that is needed for SMEs to thrive is access to funding, as such this study sought to investigate the role of financial access in the success of SMEs. The study had intended to use financial ratios as proxies for success, however, the record keeping of the SMEs or lack thereof impeded this intention, so the study measured the success of the enterprise as perceived by the owner. The study sampled SMEs from all for regions of Swaziland, and besides a descriptive analysis that were carried out to examine the utilization of credit by the SMEs. This study also used a statistical model known as the Logit model, to determine the effect that credit access had on the success of the SME and also assess the challenges/barriers that the SMEs faced when trying to access funding. The results of this study deviated from the underlying public assumption, as they showed that an SME owner that had access to funding had reduced odds of success, if anything the results showed that the success of an SME did not entirely depend on the availability of funding, and there were other potent factors that posed as barriers to financial access. / DM2016

Access to consumer credit as a means of building wealth is one of the least examined forms of social inequality. The recent economic crisis in the United States has brought attention to the significance of consumer credit in our nation's economy; however, less understood are the specific obstacles and barriers that prevent low-income individuals from reaching the "American Dream." In an exploratory manner, this study compared credit access, credit literacy, and credit experience of low-income Latinos and non-Latinos to understand how credit might translate into asset-building and home ownership for Latinos, particular for those in new immigrant destinations where access to ethnic resources is limited. Using survey data on banking practices, credit accounts, and asset ownership gathered from English- and Spanish-speaking residents in northern Utah between 2007 and 2009, this research found that low-income Latino residents are not in the same position to establish credit compared to their low-income non-Latino neighbors. As expected, Latinos in my study have less actively sought credit cards, auto loans, and other forms of debt than non-Latinos. As a consequence their credit literacy and experience is limited. Half of the Latinos in this study are not financially embedded and operate mainly outside the credit economy. Surprisingly, this study revealed that having a bank account does not necessarily change one's financial behavior; in contrast to their native-born neighbors, even Latinos with bank accounts habitually paid bills with cash and/or money orders. Lacking access to and an understanding of credit remains a critical problem for most Latino immigrants, and unless changed such practices are likely to affect their wealth-building potential for years to come. Ironically, choices to remain outside of the credit economy may have spared many immigrants from the kind of financial losses suffered by "financially embedded" individuals during the recent recession. Credit can enable families to purchase assets such as a home that enable them to accumulate wealth. On the other hand, problems with credit can lead to overspending, reliance on credit, bankruptcy, and foreclosure. More research is needed to understand the dynamics of credit and inequality for both Latinos and non-Latinos alike.

Consumer credit has become increasingly popular in Russia over the past few years. With the rapid growth of lending to individuals and companies, the need for accumulation of credit histories and information, collection services of bad debts, and credit insurance and financing also become of increased importance. It was found in this thesis that the larger credit limit given to corporate clients, the greater will the loss be if there is a default and the money cannot be collected. Giving credit to a small number of customers also increases the concentration of the risk. The opportunity to diversify in consumer credit is, however, limited because of the geo-graphic concentration of the customers, and the macro economic risk cannot be elimi-nated. Credit periods in consumer credit are in general longer, leading to higher uncertainty of payment and hence higher exposure to risk. Personal relationships are not established with customers in consumer credit, which are argued to act as “insurances” in corporate credit. Consumer credit is more common among international companies, leading to better offers and more flexibility in the service. Insurers of corporate credit have a restrictive policy with higher premiums and more administrative work, which is less attractive for companies to take on. Creditors also have to share the risk with insurance companies, often having to pay more than 15 percent of a default. With respect to what was mentioned above, it was concluded in this thesis that the risk of giving credit to individuals does not necessary have to be higher than that of corporate cli-ents, but that the terms of the contract is more favourable for the creditor in consumer credit.

<p><font face="Times-Roman" size="3"><font face="Times-Roman" size="3"><font face="Times-Roman" size="3"><font face="Times-Roman" size="3"> <p align="left">The purpose of this research effort is to contribute to the discussion on consumer indebtedness and poverty, analyse the causes and levels of indebtedness as well as the role played by both the consumer and the credit provider in the growth of consumer indebtedness among the sampled population of the Cape Flats area of West Bank in the Western Cape Province of South Africa. The methodology used in this study included both qualitative and quantitative research approaches. The research methods comprised of a comprehensive literature study and secondary data analysis, immersion in the case study area in order to observe the consumer credit market dynamics and its trends. In-depth informal and semi-formal interviewing, focus group discussions as well as a questionnaire survey were also used to gather primary data.</p> </font></font></font></font></p>

University of Macau / Faculty of Social Sciences and Humanities / Department of Government and Public Administration