The national credit act and macroeconomic variables in the context of over-indebtedness in South Africa

Abstract

This article reports on a study aimed at measuring and characterising consumer over-indebtedness in South Africa, despite the existence of financial regulatory measures and legislation. The study employed quantitative analysis to examine the impact of macroeconomic variables on consumer over-indebtedness. The primary conclusion of the study indicated that the debt-to-disposable-income ratio decreased following the enactment of the National Credit Act; nevertheless, the alterations in debt levels cannot be solely ascribed to the enforcement of regulations and legislation. The study findings indicate that over-indebtedness correlates positively with gross domestic product, consumer expenditure, unemployment, and the debt-to-income ratio, while exhibiting a negative correlation with the interest rate.

Keywords: {'name': 'National Credit Act'}, {'name': 'macroeconomic variables'}, {'name': 'over-indebtedness'}, {'name': 'South Africa'}, {'name': ', tablets'}

Authors & affiliations

Nico Keyser
Affiliation not supplied

Cecile Duvenhage
Affiliation not supplied

Mohamed Abdulla
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

DOI: 10.19030/jabr.v30i2.8406

DOI: 10.1108/01443580710745371

DOI: 10.22495/jgr_v3_i4_c2_p1

Botha, L. G. (2014). A discussion of access to credit in South Africa with specific reference to reckless lending and over-indebted consumers. (Unpublished MA thesis). Durban: University of KwaZulu-Natal.

Canner, G. B., & Luckett, C. A. (1991). Payment of household debts. Federal Reserve Bulletin, 77(4), 218–229.

DOI: 10.1093/wbro/lkl004

DOI: 10.4102/jef.v8i1.85

Department of Trade and Industry (dti). (2005). Making credit markets work. Pretoria: Government Printer.

DOI: 10.1080/09718923.2015.11893427

Fourie, F. C. van N., & Burger, P. (2015). How to think and reason in macroeconomics. Cape Town: Juta.

DOI: 10.1515/9780691188485

DOI: 10.1111/j.1470-6431.2006.00524.x

DOI: 10.1155/2013/172648

DOI: 10.1080/03057070601136616

DOI: 10.1086/676123

DOI: 10.1093/rfs/hhp092

DOI: 10.1016/0167-4870(93)90041-I

Mashigo, P. (2006). The debt spiral in poor households in South Africa. International Indigenous Journal of Entrepreneurship, Advancement, Strategy and Education, 1–21.

DOI: 10.1016/j.econmod.2013.04.028

National Credit Regulator (NCR). (2010). Consumer credit report. Pretoria.

National Credit Regulator (NCR). (2012). Credit and borrowing in South Africa. Finscope Consumer Survey South Africa. Marshalltown.

National Credit Regulator (NCR). (2016). Consumer credit report. Pretoria.

DOI: 10.1108/07363760610701878

Republic of South Africa (RSA). (2006). National Credit Act, No. 34 of 2005. Government Gazette, 28619(489). Pretoria: Government Printer.

Schicks, J. (2011). Microfinance over-indebtedness: Understanding its drivers and challenging the common myths. CERMi, Brussels. (Working paper no. 10/048).

DOI: 10.1080/00220388.2013.775421

Stoop, P. N. (2009). South African consumer credit policy: Measures indirectly aimed at preventing consumer over-indebtedness. SA Merc LJ, 365–386.

DOI: 10.54648/EULR2006093