M.B.A. / Estimated to contribute between 15-20% of earnings for each of South Africa's biggest four banks, ABSA, Nedcor, Standard Bank and FNB mortgages are the biggest contributor to the banks' profits. The economic stability that followed the emerging market crisis buoyed the mortgage industry. This, and the growth of the 'previously disadvantaged' segment, with its historically low house ownership levels, has meant that the mortgage industry is the biggest and fastest growing industry in South Africa. The positive outlook of the South African mortgage industry created by the above factors has attracted new players into the industry at various levels of the value chain. The beginning of 1999 saw the launch of South African Home Loans (SAHL), a lender that focuses on low risk buyers. Latter in the same year various estate agents teamed up to form MortgageSA, now the biggest originator group in South Africa. SAHL by focusing on low risk clients was able to offer buyers very competitive rates thereby forcing the more established banks to give away significant discounts on new mortgages as a way of protecting their market share. The 'birth' of originators have had the same detrimental effect. The originators by obtaining exclusive rights to mortgage applications generated by the estate agents and latter 'selling' them to the banks have increased the banks' acquisition costs. In 2000 alone it was estimated that originators cost the banks an extra R24million. The overall effect of the increased acquisition costs and the rate discounting has been the decline of margins. The response of the banks to the declining margins has been to adopt a high volume, low margin strategy. This has forced the banks to focus on the control of distribution channels as a means of obtaining the required volumes. In South Africa mortgage origination is mostly controlled by the intermediary channels Le. estate agents and originators with relatively little business going through the direct channels Le. internet, branches, home loan consultants and call centres. Collectively intermediaries account for 75% of total originations and direct channels 25%. Whether or not this balance between intermediary and direct originations will be...

The primary objective of the study was to develop a model which allowed banks to measure home loan risk and determine prices accordingly. A survey among banks revealed: 1. belief that the home loan market is more risky than 5 years ago 2. belief that lending in the "black" market is riskier than lending in the "white" market 3. no model is used which allows risk-measurement for the purpose of home loan pricing 4. mixed feeling as to the value of the proposed model - value, to a large extent, would depend on flexibility. A practical, flexible model has been developed which allows: 1. risk classification of loans in terms of geographical areas, product/client characteristics, and loan performance 2. risk measurement in terms of potential losses relating to each loan category 3. determination of appropriate pricing levels for each risk category. / Department of Economics / M. Com. (Accounting )

The primary objective of the study was to develop a model which allowed banks to measure home loan risk and determine prices accordingly. A survey among banks revealed: 1. belief that the home loan market is more risky than 5 years ago 2. belief that lending in the "black" market is riskier than lending in the "white" market 3. no model is used which allows risk-measurement for the purpose of home loan pricing 4. mixed feeling as to the value of the proposed model - value, to a large extent, would depend on flexibility. A practical, flexible model has been developed which allows: 1. risk classification of loans in terms of geographical areas, product/client characteristics, and loan performance 2. risk measurement in terms of potential losses relating to each loan category 3. determination of appropriate pricing levels for each risk category. / Department of Economics / M. Com. (Accounting )

M. Comm. / The aim of the study is to estimate the demand function for housing in South Africa (for the period 1989 to 1998). It is important to study the housing demand as housing demand contributes positively towards economic growth and economic stability. The main findings in chapter five show that all the estimated parameters have a significant role on the demand for housing loans in South Africa, as approved by multiple regression results. However, real interest rates have a more significant impact on the demand for home loans. The study therefore asserts that the real interest rates must be as low as possible as a way of stimulating housing demand, thus providing investment and in turn there will be an increase in economic growth. The study further and finally asserts that taxation must be decreased, as a way of stimulating disposable income thus there will be an increase in investment spending.

Research report submitted to the Department of Building, University of the Witwatersrand in partial fulfiment of the degree MSc (Building) by Course Work / The objective of this report is to investigate certain structural imbalances in the South African financial system to assess if the technique of' mortgage securitization may serve to alleviate deficiencies in the provision of housing finance as well as prerequisite in creating a secondary mortgage market in South Africa. (Abbreviation abstract ) / Andrew Chakane 2018

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

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.

Submitted in partial fulfilment of the requirements for degree Master of Management in Finance and Investments in Wits Business School of the University of the Witwatersrand / This research paper examines an economy with debt and discusses the mechanism through which a financial crisis may arise, taking into account the business cycle theories as advocated by amongst others; Karl Marx, Friederich Hayek, and John Keynes. It is found that there are various channels through which financial crises may arise. Secondly, this research paper investigates the mechanism through which bank credit propagates and prolongs the business cycle. The analysis of the data reveals that post the crisis, recoveries are slower in developed nations versus developing nations and that the deeper the recession, the longer it takes for a country to recover. Thirdly, this research paper determines the critical debt level at which economies will start to recover, following a period of economic fragility. Finally, recommendations which could contribute towards the mitigation of causes and/or effects of economic crisis are made. Key words: Bank Credit, Business Cycle / GR2018

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

M.Tech. (Operations Management) / This dissertation elaborates the reengineering of the personal loan application process in a South African bank operating in Africa. The research provides an understanding of the current situation and issues encountered with the current personal loan application process. It presents the framework for reengineering of the process and the methodology used in the research. The primary objective is to improve the existing process for personal loan credit applications in order to create improvements in the process. The research methodology used is quantitative analysis using statistical methods and qualitative research focusing on qualitative aspects with research reasoning being inductive allowing the researcher to draw conclusions from facts, assumptions and observations established through the data collection processes. The article offers a comprehensive understanding of the challenges faced in processing of loan applications. Businesses and institutes are built on good control systems which are needed to address the challenges faced in the processing of personal loan applications. The study contributes to customers service discourse in operations. The recommendation of the research is to reengineer the current personal loan process, taking into consideration the technology needed to improve the process, training of existing employees, implementation of a reward system and implementation of the redesigned process.