Determinants of household debt in South Africa

Zimucha, Tinashe M

Title: Determinants of household debt in South Africa
Creator: Zimucha, Tinashe M
Subject: Consumer credit -- South Africa Finance, Personal -- South Africa
Date Issued: 2017
Date: 2017
Type: Thesis
Type: Masters
Type: MCom
Identifier: http://hdl.handle.net/10353/7967
Identifier: vital:31325
Description: Significant changes have occurred in South Africa during the past decades in household saving and borrowing behaviour. The rapid increase in South Africa’s household debt over the last twenty years has been an international phenomenon. In most countries, household debt increased from the 1990s until the crisis of 2007–2008 before stabilising due to a recession and deleveraging. The study used an ARDL model to investigate the determinants of household debt in South Africa. Pairwise regression is used to select the most relevant variables affecting household regression in the country. The results of the study showed that consumer confidence, the bond market index and the vulnerability index have a positive effect on household debt. As consumers' faith in the performance of the economy increases, household debt also increases as expected, reflecting consumers' belief in increased future wealth. The positive influence of the vulnerability index suggests that households tend to resort to borrowing to smooth consumption when incomes and other related factors decline. It is recommended that national policy should tighten regulations around access to unsecured credit to minimise the stress on already vulnerable households.
Format: 73 leaves
Format: pdf
Publisher: University of Fort Hare
Publisher: Faculty of Management and Commerce
Language: English
Rights: University of Fort Hare

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