An analysis of the credit scoring tool implemented by South African banks for vehicle asset financing
- Authors: Ntsingila, Themba
- Date: 2024-12
- Subjects: Credit scoring systems , Consumer credit , Credit -- Management
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/69972 , vital:78254
- Description: South Africa has been experiencing an increase in the number of people buying motor vehicles for primary reason of travelling from home to work and vice versa over the past years. However, there has been also an increase in the number of bad debts written off (bank repossessions) for vehicle asset financed through by the financial institutions. The risk that borrowers are not fulfilling their obligations present a huge risk to the bank as borrowing has become the leading function of the bank. This is proven by the volumes of different loans granted by banks to individuals (Kihuro and Iraya, 2018). Hartungi (2007:397) alludes that low-income earners tend to buy expensive motor vehicle which they cannot afford. It has been noted that the increased level of consumer’s indebtedness is due to unstable economy, frequent increase of petrol prices and interest rates increases. Vehicle financing face a higher probability of customers defaulting. The trend in the increase of the household credit granting became a concern for the South African government which led to the execution of the National credit act (NCA) on 1 June 2007 in a move to regulate the act particularly to protect the household in acquiring unnecessary credit. Companies are required to explore different ways of assisting their customers by reducing the high number of debts written off for motor vehicles. This study used the quantitative approach using the survey method to collect data from respondents who are credit managers in a bank based in Gauteng province. Data collection took place in a bank using a questionpro survey distributed by email to junior credit managers, credit managers and senior credit managers to administer an open-ended questionnaire. Responses received were codified and quantitative data was analysed using Statistical tools and packages including Statistica. This research aims to assist the financial institution(s) by performing better assessment in granting of credit for asset finance and by reducing several bad debts. It is the main aim of this academic exercise to bring to the fore the scholastic analysis to further enlighten the reader about the burden of reckless lending not only to individuals who are granted credit but also the approved financial institutions themselves. The study found variable respondents’ opinion of the analysis of the credit scoring tool used. In conclusion, is perceived that the use of correct credit scoring tool will reduce the number of bad debts written off. It can be recommended that a National Credit Act intervention could be applied to mitigate the risk of defaulting in credit assessment for loans granted to consumers. Therefore, the study seeks to first look at the credit scoring tool as a viable and relevant tool used for Vehicle Asset Financing (VAF) in the banking sector, and secondly attempt to provide novel ways to improve and enhance the current system with the sole aim to align with National Credit Regulator (NCR). , Thesis (MBA) -- Faculty of Business and Economic Sciences, Business School, 2024
- Full Text:
- Date Issued: 2024-12
- Authors: Ntsingila, Themba
- Date: 2024-12
- Subjects: Credit scoring systems , Consumer credit , Credit -- Management
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/69972 , vital:78254
- Description: South Africa has been experiencing an increase in the number of people buying motor vehicles for primary reason of travelling from home to work and vice versa over the past years. However, there has been also an increase in the number of bad debts written off (bank repossessions) for vehicle asset financed through by the financial institutions. The risk that borrowers are not fulfilling their obligations present a huge risk to the bank as borrowing has become the leading function of the bank. This is proven by the volumes of different loans granted by banks to individuals (Kihuro and Iraya, 2018). Hartungi (2007:397) alludes that low-income earners tend to buy expensive motor vehicle which they cannot afford. It has been noted that the increased level of consumer’s indebtedness is due to unstable economy, frequent increase of petrol prices and interest rates increases. Vehicle financing face a higher probability of customers defaulting. The trend in the increase of the household credit granting became a concern for the South African government which led to the execution of the National credit act (NCA) on 1 June 2007 in a move to regulate the act particularly to protect the household in acquiring unnecessary credit. Companies are required to explore different ways of assisting their customers by reducing the high number of debts written off for motor vehicles. This study used the quantitative approach using the survey method to collect data from respondents who are credit managers in a bank based in Gauteng province. Data collection took place in a bank using a questionpro survey distributed by email to junior credit managers, credit managers and senior credit managers to administer an open-ended questionnaire. Responses received were codified and quantitative data was analysed using Statistical tools and packages including Statistica. This research aims to assist the financial institution(s) by performing better assessment in granting of credit for asset finance and by reducing several bad debts. It is the main aim of this academic exercise to bring to the fore the scholastic analysis to further enlighten the reader about the burden of reckless lending not only to individuals who are granted credit but also the approved financial institutions themselves. The study found variable respondents’ opinion of the analysis of the credit scoring tool used. In conclusion, is perceived that the use of correct credit scoring tool will reduce the number of bad debts written off. It can be recommended that a National Credit Act intervention could be applied to mitigate the risk of defaulting in credit assessment for loans granted to consumers. Therefore, the study seeks to first look at the credit scoring tool as a viable and relevant tool used for Vehicle Asset Financing (VAF) in the banking sector, and secondly attempt to provide novel ways to improve and enhance the current system with the sole aim to align with National Credit Regulator (NCR). , Thesis (MBA) -- Faculty of Business and Economic Sciences, Business School, 2024
- Full Text:
- Date Issued: 2024-12
Money attitudes and materialism among generation Y South Africans: a life-course study
- Authors: Duh, Helen Inseng
- Date: 2011
- Subjects: Consumers -- Research , Materialism , Consumer -- Behaviour , Consumer credit
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: vital:9286 , http://hdl.handle.net/10948/d1008612 , Consumers -- Research , Materialism , Consumer -- Behaviour , Consumer credit
- Description: Materialism has long been a subject of interest to researchers. More negative than positive consequences have been reported from studies on the lifestyles of materialists. For example, increased consumer and credit card debt, shrinking saving rates, increased number of consumers filing for bankruptcy, lower levels of life satisfaction and the depletion of natural resources are reported to be emanating from the increasing levels of materialism in societies. It is thus important to investigate the factors that can be implicated for the growth of materialism. Most of the studies attempt to explain materialism at a given point in time in isolation of the events people have experienced in their early life or childhood. Realizing that this practice is a shortcoming in consumer research, there is a call that consumer behaviour, such as materialism, be studied as a function of past life experiences using the life-course approach. While few studies have applied this approach to understanding materialism, little is known about the psychological processes that link childhood family structure to materialism. It is against this background that this study used the life-course approach to study how childhood family structure affects materialism through psychological processes of perceived family resources (tangible and intangible), perceived stress from the disruptive family events, and money attitudes of Generation Y South Africans. The study also assessed the moderating role of money attitudes on the relationship between childhood family experiences and materialism. Money attitude dimensions of status, achievement, worry, security and budget were introduced to broaden the life-course study of materialism because they are reported to begin in childhood, to remain in adulthood and they function in the background of every behavioural intention and action. Generation Y (commonly reported to be born between 1977 and 1994) were the subject of this study, because the literature reviewed revealed that these emerging consumers are not only numerous (about 30 percent of South Africans are Generation Y), have considerable influence and spending power, but most have been raised in disrupted single-parent/income families. With reports from family sociologists on the outcomes of divorce and single-parenthood (for example, stress, inadequate family resources, and low self-esteem) questions were raised as to how these outcomes would affect Generation Y money attitudes and materialistic values. Ten hypotheses were formulated to empirically answer the research questions. Using quantitative methodologies based on the nature of the research questions and problems, data were collected through online questionnaire from 826 business undergraduate students from the Nelson Mandela Metropolitan and Western Cape Universities. University-aged respondents were appropriate for this study since they are ideally suited to remember their past family circumstances and must have already formed consumption habits, attitudes and values at their age. The first research problem was to evaluate how two of the life-course theoretical perspectives (i.e., family resources and stress) selected for this study would explain the materialistic values of Generation Y South Africans raised in non-intact (did not live with both biological parents before 18th birthday) and intact (lived with both biological parents before 18th birthday) family structures through the money attitudes adopted. The results showed that even though a significant difference in perceived family resources (both tangible and intangible) and stress was found between subjects raised in non-intact (or disrupted) and intact families, the difference in materialism as a whole was not significant. In terms of the three materialistic values of success, happiness and centrality, subjects raised in disrupted families significantly scored higher in the happiness dimension. For the money attitude dimensions of status, achievement, worry, budget and security they significantly scored higher in the worry money attitude. Results of the correlation analyses showed that perceived decrease in tangible (food, clothing and pocket money) family resources was a childhood factor that affected later worry money attitude to significantly and positively influence all of the three materialistic values. Perceived decreases in intangible family resources (for example, love and emotional support) negatively affected the symbolic money attitudes of status and worry, which in turn, positively affected only the happiness dimension of materialism. Perceived increase in stress positively affected all of the symbolic money attitudes of status, worry and achievement. These, in turn, positively influenced only the success and happiness materialistic values. The second research problem was based on an assessment of the moderating role of money attitudes on the childhood family experiences to materialism relationship. Using hierarchical regression analyses, it was found that only the achievement and worry money attitude dimensions moderated the family resources to materialism relationship. This means that when subjects hold higher worry and achievement money attitudes, an increase in family resources (tangible and intangible) will have less effect in reducing materialistic tendencies. For the stress to materialism relationship, only the worry money attitude dimension had a moderating effect, meaning that when higher worry money attitude is held, an increase in stress from family disruptions would have a greater effect in increasing materialistic tendencies. None of the five money attitude dimensions did, however, moderate the childhood family structure to materialism relationship. The results of this study do not only have theoretical implications, but also provide valuable information to consumer-interest groups, banks and retailers, especially in terms of the money attitudes of Generation Y consumers in South Africa.
- Full Text:
- Date Issued: 2011
- Authors: Duh, Helen Inseng
- Date: 2011
- Subjects: Consumers -- Research , Materialism , Consumer -- Behaviour , Consumer credit
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: vital:9286 , http://hdl.handle.net/10948/d1008612 , Consumers -- Research , Materialism , Consumer -- Behaviour , Consumer credit
- Description: Materialism has long been a subject of interest to researchers. More negative than positive consequences have been reported from studies on the lifestyles of materialists. For example, increased consumer and credit card debt, shrinking saving rates, increased number of consumers filing for bankruptcy, lower levels of life satisfaction and the depletion of natural resources are reported to be emanating from the increasing levels of materialism in societies. It is thus important to investigate the factors that can be implicated for the growth of materialism. Most of the studies attempt to explain materialism at a given point in time in isolation of the events people have experienced in their early life or childhood. Realizing that this practice is a shortcoming in consumer research, there is a call that consumer behaviour, such as materialism, be studied as a function of past life experiences using the life-course approach. While few studies have applied this approach to understanding materialism, little is known about the psychological processes that link childhood family structure to materialism. It is against this background that this study used the life-course approach to study how childhood family structure affects materialism through psychological processes of perceived family resources (tangible and intangible), perceived stress from the disruptive family events, and money attitudes of Generation Y South Africans. The study also assessed the moderating role of money attitudes on the relationship between childhood family experiences and materialism. Money attitude dimensions of status, achievement, worry, security and budget were introduced to broaden the life-course study of materialism because they are reported to begin in childhood, to remain in adulthood and they function in the background of every behavioural intention and action. Generation Y (commonly reported to be born between 1977 and 1994) were the subject of this study, because the literature reviewed revealed that these emerging consumers are not only numerous (about 30 percent of South Africans are Generation Y), have considerable influence and spending power, but most have been raised in disrupted single-parent/income families. With reports from family sociologists on the outcomes of divorce and single-parenthood (for example, stress, inadequate family resources, and low self-esteem) questions were raised as to how these outcomes would affect Generation Y money attitudes and materialistic values. Ten hypotheses were formulated to empirically answer the research questions. Using quantitative methodologies based on the nature of the research questions and problems, data were collected through online questionnaire from 826 business undergraduate students from the Nelson Mandela Metropolitan and Western Cape Universities. University-aged respondents were appropriate for this study since they are ideally suited to remember their past family circumstances and must have already formed consumption habits, attitudes and values at their age. The first research problem was to evaluate how two of the life-course theoretical perspectives (i.e., family resources and stress) selected for this study would explain the materialistic values of Generation Y South Africans raised in non-intact (did not live with both biological parents before 18th birthday) and intact (lived with both biological parents before 18th birthday) family structures through the money attitudes adopted. The results showed that even though a significant difference in perceived family resources (both tangible and intangible) and stress was found between subjects raised in non-intact (or disrupted) and intact families, the difference in materialism as a whole was not significant. In terms of the three materialistic values of success, happiness and centrality, subjects raised in disrupted families significantly scored higher in the happiness dimension. For the money attitude dimensions of status, achievement, worry, budget and security they significantly scored higher in the worry money attitude. Results of the correlation analyses showed that perceived decrease in tangible (food, clothing and pocket money) family resources was a childhood factor that affected later worry money attitude to significantly and positively influence all of the three materialistic values. Perceived decreases in intangible family resources (for example, love and emotional support) negatively affected the symbolic money attitudes of status and worry, which in turn, positively affected only the happiness dimension of materialism. Perceived increase in stress positively affected all of the symbolic money attitudes of status, worry and achievement. These, in turn, positively influenced only the success and happiness materialistic values. The second research problem was based on an assessment of the moderating role of money attitudes on the childhood family experiences to materialism relationship. Using hierarchical regression analyses, it was found that only the achievement and worry money attitude dimensions moderated the family resources to materialism relationship. This means that when subjects hold higher worry and achievement money attitudes, an increase in family resources (tangible and intangible) will have less effect in reducing materialistic tendencies. For the stress to materialism relationship, only the worry money attitude dimension had a moderating effect, meaning that when higher worry money attitude is held, an increase in stress from family disruptions would have a greater effect in increasing materialistic tendencies. None of the five money attitude dimensions did, however, moderate the childhood family structure to materialism relationship. The results of this study do not only have theoretical implications, but also provide valuable information to consumer-interest groups, banks and retailers, especially in terms of the money attitudes of Generation Y consumers in South Africa.
- Full Text:
- Date Issued: 2011
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