scholarly journals THE DETERMINANTS OF BANK CREDIT GROWTH AND CREDIT AGGREGATE BEHAVIOR DURING ALTERNATE BUSINESS CYCLES IN SOUTH AFRICA

2016 ◽  
Vol 1 (1) ◽  
pp. 18-31
Author(s):  
Dr. Goodman Chakanyuka
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Business Cycles ◽  
Quantitative Research ◽  
Bank Lending ◽  
Capital Requirements ◽  
Bank Credit ◽  
Bank Competition ◽  
Structured Interviews ◽  
Credit Growth

Purpose: The purpose of this study was to Analyze of the Relationship between Business Cycles and Bank Credit Extension: Evidence from South Africa. The study sought establish the determinants of bank credit growth in South Africa and how the different credit aggregates behave during alternate business cyclesMethodology: This study adopted qualitative and quantitative research. The qualitative research involves structured interviews with influential or well informed people on the subject matter. The study is used to understand the key determinants of bank credit in South Africa and to appreciate how each of the credit aggregates behaves during alternate business cycles. The qualitative results are used to formulate questions of the structured survey questionnaire. The ANOVA and Pearman’s product correlation analysis techniques are used to assess relationship between variables.Results: Results revealed that, key determinants of commercial bank credit in South Africa as economic growth, collateral value, bank competition, money supply, deposit liabilities, capital requirements, bank lending rates and inflation. The quantitative results show that there is direct and positive relationship between bank lending behaviour and credit aggregates namely economic growth, collateral value, bank competition and money supply.Unique contribution to theory, practice and policy: It proposes practical policy prescriptions to address challenges currently facing South Africa. The other major contribution of this study is that it shall open new avenues for further research on determinants of bank credit growth in South Africa and how the different credit aggregates behave during alternate business cycles.

scholarly journals THE DIRECTION ANALYSIS OF CAUSALITY BETWEEN ECONOMIC AND BANK CREDIT GROWTH IN SOUTH AFRICA

2016 ◽  
Vol 1 (2) ◽  
pp. 42
Author(s):  
Dr. Goodman Chakanyuka
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Business Cycles ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Bank Credit ◽  
Causality Test ◽  
Credit Growth ◽  
Study Results ◽  
The Relationship

Purpose: The purpose of this study was to Analyze of the Relationship between Business Cycles and Bank Credit Extension: Evidence from South Africa. The study sought establish the direction of causality between economic growth and bank credit growth in South AfricaMethodology: The econometric methodology is used to augment results of the survey study. Granger causality test technique is applied to the variables of interest to test for direction of causation between variables. The study uses quarterly data for the period of 1980: Q1 to 2013: Q4. Business cycles are determined and measured by Gross Domestic Product at market prices while bank-granted credit is proxied by credit extension to the private sector.Results: Results revealed that, that there is a stable long-run relationship between macro-economic business cycles and real credit growth in South Africa. The results show that economic growth significantly causes and stimulates bank credit. The Granger causality test provides evidence of unidirectional causal relationship with direction from economic growth to credit extension for South Africa. The study results indicate that the case for demand-following hypothesis is stronger than supply-leading hypothesis in South Africa. Economic growth spurs credit market development in South Africa.Unique contribution to theory, practice and policy: It proposes practical policy prescriptions to address challenges currently facing South Africa. The other major contribution of this study is that it shall open new avenues for further research on finding causality of the relationship between various proxies of economic growth and financial development adopting the VAR framework

ANALYSIS OF THE LONG-RUN RELATIONSHIP BETWEEN ECONOMIC GROWTH AND BANK CREDIT AVAILABILITY IN SOUTH AFRICA.

2017 ◽  
Vol 1 (1) ◽  
pp. 1
Author(s):  
Goodman Chakanyuka
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Business Cycles ◽  
Granger Causality ◽  
Granger Causality Test ◽  
Bank Credit ◽  
Causality Test ◽  
Credit Growth ◽  
Long Run ◽  
The Relationship

Purpose: The purpose of this study was to Analyze of the Relationship between Business Cycles and Bank Credit Extension: Evidence from South Africa. The study sought establish the direction of causality between economic growth and bank credit growth in South AfricaMethodology: The econometric methodology is used to augment results of the survey study. Granger causality test technique is applied to the variables of interest to test for direction of causation between variables. The study uses quarterly data for the period of 1980: Q1 to 2013: Q4. Business cycles are determined and measured by Gross Domestic Product at market prices while bank-granted credit is proxied by credit extension to the private sector.Results: Results revealed that, that there is a stable long-run relationship between macro-economic business cycles and real credit growth in South Africa. The results show that economic growth significantly causes and stimulates bank credit. The Granger causality test provides evidence of unidirectional causal relationship with direction from economic growth to credit extension for South Africa. The study results indicate that the case for demand-following hypothesis is stronger than supply-leading hypothesis in South Africa. Economic growth spurs credit market development in South Africa.Unique contribution to theory, practice and policy: It proposes practical policy prescriptions to address challenges currently facing South Africa. The other major contribution of this study is that it shall open new avenues for further research on finding causality of the relationship between various proxies of economic growth and financial development adopting the VAR framework

scholarly journals Non-bank financial institutions and economic growth: Evidence from Africa’s three largest economies

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Ronald Rateiwa ◽  
Meshach J. Aziakpono
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Financial Institutions ◽  
Time Series Data ◽  
Bank Lending ◽  
Series Data ◽  
The Sustainable Development ◽  
Long Run ◽  
The Relationship

Background: In order for the post-2015 world development agenda – termed the sustainable development goals (SDGs) – to succeed, there is a pronounced need to ensure that available resources are used more effectively and additional financing is accessed from the private sector. Given that traditional bank lending has slowed down, the development of non-bank financing has become imperative. To this end, this article intends to empirically test the role of non-bank financial institutions (NBFIs) in stimulating economic growth.Aim: The aim of this article is to empirically test the existence of a long-run equilibrium relationship between economic growth and the development of NBFIs, and the causality thereof.Setting: The empirical assessment uses time-series data from Africa’s three largest economies, namely, Egypt, Nigeria and South Africa, over the period 1971–2013.Methods: This article uses the Johansen cointegration and vector error correction model within a country-specific setting.Results: The results showed that the long-run relationship between NBFI development and economic growth is relatively stronger in Egypt and South Africa, than in Nigeria. Evidence in respect of Nigeria shows that such a relationship is weak. The nature of the relationship between NBFI development and economic growth in Egypt is positive and significant, and predominantly bidirectional. This suggests that a virtuous relationship between NBFIs and economic growth exists in Egypt. In South Africa, the relationship is positive and significant and predominantly runs from NBFI development to economic growth, implying a supply-leading phenomenon. In Nigeria, the results are weak and mixed.Conclusion: The study concludes that in countries with more developed financial systems, the role of NBFIs and their importance to the economic growth process are more pronounced. Thus, there is need for developing policies targeted at developing the NBFI sector, given their potential to contribute to economic growth.

Economic Growth and Political Change: the South African Case

1981 ◽  
Vol 19 (4) ◽  
pp. 667-704 ◽  
Author(s):  
Stanley B. Greenberg
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Capital Accumulation ◽  
Political Change ◽  
Capital Requirements ◽  
Social Position ◽  
Class Formation ◽  
Living Standard ◽  
Business Enterprise ◽  
Racial Lines

People of quite diverse social position and perspective have turned to economic growth as a source of political change in South Africa. Contained within the concept of growth, they maintain, are processes — capital accumulation and class formation, business enterprise and markets, changing skill and capital requirements – that, at the very least, allow some blacks a more secure and higher living standard, that may bring greater equality between the races, or more profoundly, confound traditional racial lines and privileges of quite diverse social position and perspective have turned to economic growth as a source of political change in South Africa. Contained within the concept of growth, they maintain, are processes — capital accumulation and class formation, business enterprise and markets, changing skill and capital requirements – that, at the very least, allow some blacks a more secure and higher living standard, that may bring greater equality between the races, or more profoundly, confound traditional racial lines and privileges. Indeed, some argue that growth undermines the foundations of the racial state. Many of those who posit a relationship between economics and politics, take the next logical step: supporting actions, including foreign investment, that foster economic growth and, presumably, political change in South Africa.

scholarly journals The Impact of CRD IV on Bank Lending

2019 ◽  
Vol 8 (2) ◽  
pp. 203-217
Author(s):  
Matias Huhtilainen
Keyword(s):  
Bank Lending ◽  
Banking Regulation ◽  
Capital Requirements ◽  
Bank Credit ◽  
Bank Profitability ◽  
Consistent Finding ◽  
Loan Supply ◽  
The Impact ◽  
The Relationship ◽  
Crd Iv

This study addresses the post-financial crisis EU banking regulation reform CRD IV. The specific focus is on the relationship between increased capital requirements and the subsequent change in both supply and the price of bank credit. This study employs a twofold data consisting of a panel of Finnish unlisted savings and cooperative banks’ key figures over the period 2002-2018 and a representative survey conducted with personnel of Finnish institutions. In addition to the consistent finding in regards to the effect of bank profitability as well as fairly consistent findings in regards to the effect of bank size and GDP growth, the key finding suggests a slight decrease in loan supply under the CRD IV.

scholarly journals PERAN DANA PIHAK KETIGA DALAM MEMEDIASI PENGARUH NET INTEREST MARGIN TERHADAP PERTUMBUHAN KREDIT PADA PERBANKAN YANG GO PUBLIC DI BURSA EFEK INDONESIA

2020 ◽  
Vol 21 (1) ◽  
pp. 51
Author(s):  
Pristin Prima Sari ◽  
Ardian Prima Putra
Keyword(s):  
Interest Rates ◽  
Stock Exchange ◽  
Bank Lending ◽  
Third Party ◽  
Bank Credit ◽  
Process Data ◽  
Credit Growth ◽  
Net Interest Margin ◽  
The Government ◽  
Interest Margin

AbstractsThe study found empirical proof the role of third party funds (DPK) mediate the influence of net interest margin (NIM) on bank credit growth listed in Indonesia Stock Exchange on 2015-2018. The study uses data from the bank�s annual financial statements. The Study covers 22 commercial banks resulting in 88 bank-year observations. Research using Smartpls 3.0 statistical tools to process data and path analysis to compute data. The results obtained are third party funds (DPK) that can positively mediate the influence of net interest margin (NIM) on credit growth. The greater DPK create the profitability of bank interest rates increases bank credit growth. Partially Net interest margin (NIM) and third party funds (DPK) can increase bank credit growth. Net interest margin (NIM) also can increase the amount of third party funds (DPK). This study is useful for bank management to make decisions on determining bank margins, obtaining third party funds (DPK) and credit, for the government for study and mapping materials related to bank lending and the amount of bank interest rates, for further research is for reference material related to factors affecting lending.Keywords : Net Interest Margin, Third Party Fund, Credit, IDX

scholarly journals Public outlook on small and medium enterprises as a strategic tool for economic growth and job creation in South Africa

2015 ◽  
Vol 4 (4) ◽  
pp. 412-418 ◽  
Author(s):  
Lawrence Mpele Lekhanya
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Quantitative Research ◽  
Small And Medium Enterprises ◽  
Job Creation ◽  
Primary Data ◽  
Research Approach ◽  
Survival And Growth ◽  
Analyse Data ◽  
Medium Enterprises

In spite of the key role played by the Small and Medium enterprises in economic development, there has been little effort to look at what needs to be done to improve survival and growth of SMEs. There is still a general lack of in-depth understanding from policy makers and other relevant stakeholders of how SMEs can be used as a strategic tool for economic growth and job creation in South Africa. These misperceptions and misunderstand leads to continuous failure to SMEs survival and growth. This study seeks to address this research gap. The study investigates the public views on what needs to be done to grow South African economy through the development of SMEs. Quantitative research approach was used to collect and analyse data for the study. Primary data was collected from four (4) provinces of South Africa. 230 people participated in the study. Questionnaires were emailed to each respondent and follow-ups were made via telephone. It was found that many SMEs fail within five years of their existence due to the various reasons. The most critical of these were related to lack of access to finance, lack of management experience as well as human capital. Study further revealed that most the SMEs owners/managers do not have business management related skills but rather they are just ordinary entrepreneurs.

scholarly journals Corporate social investment and a company’s image: A case of a CSI initiative in a South African low income community

2015 ◽  
Vol 11 (3) ◽  
pp. 130-135
Author(s):  
Paul-Francois Muzindutsi ◽  
Tshediso Joseph Sekhampu
Keyword(s):  
South Africa ◽  
South African ◽  
Low Income ◽  
Quantitative Research ◽  
Social Investment ◽  
Structured Interviews ◽  
Community Members ◽  
Corporate Social ◽  
A Company ◽  
Corporate Social Investment

One of the goals of corporate social investment (CSI) is to ensure that a company becomes a responsible entity which acts as a conscientious citizen within a society. CSI plays an important role in enhancing how a company is perceived within the community it operates in. This paper used a combination of qualitative and quantitative research designs to investigate the effect of a specific CSI initiative on a company’s image within a low income community in South Africa. Semi-structured interviews and survey questionnaire were used to collect data from community members in the township of Bophelong, South Africa. Results show that, if adequately managed, CSI initiatives tend to enhance company’s image as well as its relations with the community it operates in. However, if not adequately managed CSI can created unreachable expectations that can negatively affect a company’s image. Thus, companies better manage their CSI initiatives have an increased opportunity to enhance their reputation within the community they operate in.

scholarly journals Bank lending, expenditure components and inflation in South Africa: assessment from bounds testing approach

2011 ◽  
Vol 11 (2) ◽  
pp. 217-228 ◽  
Author(s):  
Emmanuel Ziramba
Keyword(s):  
South Africa ◽  
Money Supply ◽  
Bank Lending ◽  
Real Income ◽  
Bank Credit ◽  
Consumption Expenditure ◽  
Bounds Testing ◽  
Import Prices ◽  
Final Consumption ◽  
Long Run

This empirical study examines the long-run relationship between inflation and its determinants in South Africa. Three models of inflation involving money supply, bank credit and expenditure components are tested using the unrestricted error correction models of Pesaran et al. (2001). Unlike other existing studies on the subject, one of the models in the present study considers various components of real income as determinants. The disaggregated components are final consumption expenditure, expenditure on investment goods and exports. Based on ‘bounds’ testing, the presence of a long-run equilibrium relationship between inflation and its determinants is confirmed for all three models. The study found that the major causes of inflation in South Africa are import prices, real income, and final consumption expenditure. The relationship is elastic for import prices and final consumption expenditure. Monetary variables, money supply and bank credit are found to have an indirect effect on inflation.

Econometric analysis of bank lending and business cycles in South Africa

2010 ◽  
Vol 42 (29) ◽  
pp. 3803-3811 ◽  
Author(s):  
Oludele Akinloye Akinboade ◽  
Daniel Makina
Keyword(s):  
South Africa ◽  
Business Cycles ◽  
Bank Lending ◽  
Econometric Analysis
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