 What matters more for South African households’ debt repayment difficulties?Ralph Abbey Ssebagala Development Southern Africa, 2016, vol. 33, issue 6, 757-773 Abstract: While the increased access to consumer credit has helped many families improve their welfare, the rising repayment burdens upon a background of chronically low saving rates have generated concerns that South African families are becoming ever more financially fragile and less able to meet their consumer debt repayment obligations. Using data from the Cape Area Panel Study, this article investigates whether consumer debt repayment problems are better explained by excessive spending which leaves households financially overstretched or by negative income shocks. The results indicate that households are significantly more likely to be delinquent on their financial obligations when they suffer negative events beyond their control rather than due to the size of the expenditure burden. This suggests that consumer repayment problems are likely to endure even when consumers borrow within their means. Thus, regulatory efforts to improve mechanisms for debt relief might be more meaningful than restrictions on lending. Date: 2016 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:deveza:v:33:y:2016:i:6:p:757-773 Ordering information: This journal article can be ordered from DOI: 10.1080/0376835X.2016.1231055 Access Statistics for this article Development Southern Africa is currently edited by Marie Kirsten More articles in Development Southern Africa from Taylor & Francis Journals |
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