The Nature of the Creditor-Debtor Relationship in South Africa
DOI:
https://doi.org/10.20525/ijrbs.v2i2.67Keywords:
Banking, Finance, BorrowersAbstract
This article was a result of an investigation measuring the ‘Correlation between Borrower Education and Non-payment Behaviour in Low Income Homeowners in South Africa as the premise of the study and poor relationship between lenders and borrowers as the secondary proposition. The study was motivated by the high level of foreclosures for non-payment of mortgages in the Protea Glen area in Johannesburg, Gauteng, as reported by the Human Rights Commission Inquiry in 2008. In investigating this non- payment behaviour the researcher employed largely quantitative instruments supplemented by qualitative methods. The study revealed interesting empirical findings that largely invalidated the founding hypotheses, despite existing theoretical frameworks - underpinned by various scholars - that sought to corroborate the hypotheses. The findings have however supported the premise that households reporting poor relationships with lenders were susceptible to non-payment behaviour. The rest of the secondary hypotheses were rejected by the empirical findings, viz. that there was no correlation between the level of formal education and non-payment behaviour; the link between propensity to default and the age of homeowners were also invalidated. From these findings, it can be demonstrated that there is a critical need for mitigating measures to remedy the identified shortcomings in this sector.
References
Ambrose, B.W (2000) Embedded Options in the Mortgage Manufactured in The Netherlands: Neural Network Models in Empirical Land-use Change Modeling: A case study. International Journal of Geographical Information Science Vol. 25, No. 1.
Anani, A.O (2010) Attracting and Retaining Customers in South Africa’s Banking Sector. Published by Nelson Mandela Metropolitan University, Port Elizabeth, South Africa.
Banking Association of South Africa (BASA), (2006 updated 2007) Major Issues Facing Lenders and Providers of Finance to FSC target market. Johannesburg.
Carswell, A.T. (2009) Does Counselling Change Consumer Financial Behaviour: Evidence from Philadelphia. Journal of Family and Economic Issues, USA.
Carswell, A.T. (2009a) Does Counselling Change Consumer Financial Behaviour: Evidence from Philadelphia. Journal of Family and Economic Issues, USA, p.340.
Finscope (2006) Report on the Overview of Housing Finance Systems in South Africa, Johannesburg, South Africa.
Fox, W. (1998) Social Statistics. MicroCase Corporation Publishers, Washington, USA.p.135.
World Bank Report, (2000) Living Standards Measurement Study, New York.
Huston S.J.(2010) Measuring Financial Literacy. The Journal of Consumer Affairs, Vol. 44, No. 2.Published by the American Council on Consumer Interests.
Inequality after Apartheid‖. Paper Prepared for After Apartheid Conference, Cape Town.
The South African Human Rights Commision (SAHRC) Report on Evictions and Repossessions, 2008, Johannesburg (SAHRC Report 2008).
Kassarjian H.H and Robertson, T.S (1991) Perspectives in Consumer Behaviour. Prentice Hall, Englewood Cliffs, New Jersey, USA.
Lightstone Property Index Report, (2011) ―Sales in Execution in Protea Glen, Soweto, Johannesburg.Lightstone Report (2013) Statistical report on Sales in Execution in South Africa: A Provincial Breakdown Property Indicator, Johannesburg.
Monticone, C, (2010). How Much Does Wealth Matter in the Acquisition of Financial Literacy?The Journal of Consumer Affairs, Vol. 44, No. 2 Pubblished by the American Council on Consumer Interests.
Nanda, K.C. (1999) Credit and Banking: What Every Small Entrepreneur and Banker Must Know. Response Book Publishers, London
Social Survey, (2003) An Investigation on NHFC Borrower Market. Johannesburg
Property24, 10 July, 2011. Mortgage Defaults Surge Johannesburg. Accessed 10 December, Johannesburg.
Lightstone Property Index Report, (2012) Written Bonds by Different Lenders in South Africa
Kamhunga, S. (2011) Appetite for Affordable Housing Lending Grows. Business Day, 14 October. Johannesburg.
Property24 website, 10 July, 2011. Mortgage Defaults Surge. Johannesburg Accessed February 2012, www.property24.com
Santomero, A. (2008) Valuations of Mortgages and Mortgage Instruments. Lecture Notes, June 2008, Wharton School, University of Pennsylvania, Philadelphia, USA. p.35.
Santomero, A.(2008 a) Valuations of Mortgages and Mortgage Instruments. Lecture Notes, June 2008, Wharton School, University of Pennsylvania, Philadelphia, USA.
Schwartz ,S. (2006) Counselling the Overindebted: A Comparative Perspective. Paper presented Research for Presentation at the 2006 Assets Learning Conference, Phoenix, School of Public Policy and Administration, Carleton University, Canada
The Report on Global Consumer Banking Survey (2011). A Global Survey on Customer Satisfaction Trends.
Van Ravesteyn, L.J (2005) The Effect of Relationship Banking on Customer Loyalty in the Retail Business Banking Industry. University of South Africa, Pretoria, South Africa.
United Nations (2005) Report on Household Sample Surveys in Developing and Transition UN Publishers, New York.
Willemse, I. (1999) Statistical Methods and Financial Calculations.Juta and Company Publishers, Cape Town, South Africa. p.99
Downloads
Published
How to Cite
Issue
Section
License
Authors contributing to IJRBS agree to publish their articles under the Creative Commons Attribution- 4.0 International (CC BY 4.0) license, allowing third parties to share their work (copy, distribute, transmit) and to adapt it, under the condition that the authors are given credit, that the work is not used for commercial purposes, and that in the event of reuse or distribution, the terms of this license are made clear. Authors retain the copyright of their work, with first publication rights granted to IJRBS. However, authors are required to transfer copyrights associated with commercial use to the Publisher. The authors agree to the terms of this Copyright Notice, which will apply to this submission if and when it is published by this journal
Submission of an article implies that the work described has not been published previously (except in the form of an abstract or as part of a published lecture or academic thesis), that it is not under consideration for publication elsewhere, that its publication is approved by all authors and tacitly or explicitly by the responsible authorities where the work was carried out, and that, if accepted, it will not be published elsewhere in the same form, in English or in any other languages, without the written consent of the Publisher. The Editors reserve the right to edit or otherwise alter all contributions, but authors will receive proofs for approval before publication
