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.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:unisa/oai:uir.unisa.ac.za:10500/3740 |
| Date | 11 1900 |
| Creators | Mtimkulu, Z. M. |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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