Analysis of credit expansion in South Africa

Mbayi, Willy Bashiya

Analysis of credit expansion in South Africa

Master Thesis

2008

Publisher

University of Cape Town

Department

Department of Finance and Tax

Faculty

Faculty of Commerce

Abstract

Developments in South Africa over the past few years clearly testify to the strong relationships between economic growth and credit expansion. The paper analyses the factors driving credit growth in South Africa. It shows the strong income effect on the credit level in South Africa while the changes in interest rates do negatively affect home loans but have less effect on other components of bank credit to the private sector. This paper concludes that the interest rates policy must be combined with other tools of monetary and financial policy to guarantee a structurally lower level of credit to the private sector.

Description

Includes bibliographical references (leaves 71-74).

Keywords

Finance

Reference:

Collections

Masters

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