How to Tame the Household Debt Without Raising the Interest Rates?

2004 ◽  
Author(s):  
Mohan Nandha
Keyword(s):  
Interest Rates ◽  
Household Debt

The impact of interest rates on household debt accumulation in Malaysia: a structural break analysis

2020 ◽  
Vol 19 (2) ◽  
pp. 193
Author(s):  
Shamzaeffa Samsudin ◽  
Hafizah Hammad Ahmad Khan ◽  
Hussin Abdullah
Keyword(s):  
Interest Rates ◽  
Structural Break ◽  
Household Debt ◽  
Debt Accumulation ◽  
The Impact

scholarly journals Low Interest Rates and the Distribution of Household Debt

2021 ◽  
Author(s):  
Marina Emiris ◽  
Francois Koulischer
Keyword(s):  
Interest Rates ◽  
Household Debt ◽  
Low Interest Rates

scholarly journals Determinants of Household Debt in Botswana: 1994-2012

2015 ◽  
Vol 1 (1) ◽  
pp. 14 ◽  
Author(s):  
Faith M. Zimunya ◽  
Mpho Raboloko
Keyword(s):  
Interest Rates ◽  
Money Supply ◽  
Gdp Per Capita ◽  
Household Debt ◽  
Vector Error Correction ◽  
Vector Error ◽  
Long Run ◽  
Short Run ◽  
Per Capita ◽  
The Relationship

<p><em>The paper identifies the factors that are influential in determining the growth of household debt in Botswana. Understanding the relationship between household debt and other economic indicators is an important step towards formulating focused and effective policies that control the effects of household debt on the whole economy. Using quarterly data from the first quarter of 1994 to the second quarter of 2012,</em><em> </em><em>the paper employs the Vector Error Correction Model (VECM) to analyse the influence of </em><em>G</em><em>ross </em><em>D</em><em>omestic </em><em>P</em><em>roduct (GDP) per capita, interest rates, inflation, household consumption and money supply on household debt. The findings indicate that GDP per capita, interest rates and money supply determine changes in household debt in the long-run. Further analysis shows that lagged household debt, interest rates and money supply influence changes in household debt in the short-run.</em></p><p><em><br /></em></p>

scholarly journals U.S. Interest Rate and Household Debt Sustainability: The Case of Korea

2019 ◽  
Vol 11 (14) ◽  
pp. 3759
Author(s):  
Jong Chil Son ◽  
Hail Park
Keyword(s):  
Interest Rates ◽  
Gradual Increase ◽  
Housing Prices ◽  
Rapid Expansion ◽  
Household Debt ◽  
Debt Sustainability ◽  
Vector Autoregression Model ◽  
Autoregression Model ◽  
Vulnerable Households ◽  
The U.S

This paper revisits the issue of household debt sustainability in Korea responding to changes in U.S. interest rates. We investigate not only the transmission channels from U.S. interest rates to domestic interest rates, using the Bayesian VAR (vector autoregression) model, but also the issue of identifying households that are vulnerable in terms of their debt repayments, and we execute projections for the upcoming years given conditional forecasts and various macroeconomic scenarios. The estimation results indicate that first, the domestic policy rate will likely increase and then stagnate conditionally on the path of the U.S. policy rates. Second, the ratios of vulnerable households over total indebted households, which has been growing since 2012, will likely expand mildly over the upcoming years given an approximately 1.6%p gradual increase in interest rates and stable macroeconomic environments. Finally, however, the projected trend of domestic interest rates can cause a rapid expansion in the ratios of vulnerable households, in conjunction with a series of combined negative shocks such as highly concentrated principal repayment schedules, sharp declines in housing prices, and the occurrence of a crisis.

scholarly journals The credit consumption pattern in South Africa: A trend analysis

2015 ◽  
Vol 5 (3) ◽  
pp. 194-204
Author(s):  
Ashley Teedzwi Mutezo
Keyword(s):  
South Africa ◽  
Interest Rates ◽  
Developed Countries ◽  
Disposable Income ◽  
Consumption Pattern ◽  
Household Debt ◽  
Long Run ◽  
Short Run ◽  
The Developed Countries ◽  
The Relationship

While the developed countries witnessed a significant contraction in credit consumption in response to the financial crisis in 2008, South Africa’s household debt continues to be on the increase. This article is based on empirical research on the relationship between household debt and disposable income, net wealth, interest rates and inflation for the period between 1975 and 2013. Using regression analyses, the study examines the linkage between household debt and consumption spending in South Africa to capture the short-run and long-run dynamics. The results show that there is a significant relationship between household debt and disposable income, net wealth and inflation. Further tests indicate that there is a bidirectional causality running from economic growth to household debt and vice versa. However, it is revealed that there is no direct relationship between household debt and lending rates

scholarly journals Determinants of household over-indebtedness in South Africa

2021 ◽  
Vol 09 (02) ◽  
Author(s):  
Roseline Tapuwa Karambakuwa ◽  
◽  
Ronney Ncwadi ◽  
Keyword(s):  
South Africa ◽  
Interest Rates ◽  
Disposable Income ◽  
Household Debt ◽  
Management Skills ◽  
Finance Management ◽  
Household Disposable Income ◽  
Negative Impacts ◽  
Social Grant ◽  
Female Headed Households

The proportion of household debt to disposable income is high in South Africa, signifying over-indebtedness which reduces the welfare of households. High debt leads to low savings, negatively impacting economic growth. This paper presents the determinants of household debt distress in South Africa and comes up with recommendations on how to manage household debt. The objectives are achieved through systematic literature review. Findings suggest that households are over-indebted because of several reasons. They lack necessary finance management skills and proper protection from predatory practices by lenders. Household indebtedness is also caused by the rising cost of living which leads to low household disposable income and savings, high interest rates, misfortunes and adverse trigger events and income inequalities. Education, age and being a recipient of a social grant all have positive and negative impacts on household indebtedness. Findings also suggest that female-headed households, renting households, large households, urban based households, households with a mortgage and households where the head is not working, is sick or disabled are more likely to be over-indebted. A framework is presented with recommendations on how household debt can be effectively managed in South Africa. Upskilling in finance management can help improve the way households manage their finances. Moneylending institutions should avoid predatory lending and disclose vital information affecting household borrowing decisions. A downward review of interest rates on debt is necessary with a balance between profitability and sustainability of loan repayments. Consumption insurance on loans is recommended to cushion debt distressed households.

scholarly journals Developing a framework for managing household debt The case of South Africa

2021 ◽  
Vol 12 (01) ◽  
Author(s):  
Roseline Tapuwa Karambakuwa ◽  
◽  
Ronney Ncwadi ◽  
Keyword(s):  
South Africa ◽  
Interest Rates ◽  
Urban Areas ◽  
Secondary Data ◽  
Disposable Income ◽  
Household Debt ◽  
Finance Management ◽  
Household Disposable Income ◽  
Social Grant ◽  
Female Headed Households

The proportion of household debt to disposable income is very high in South Africa, signifying over-indebtedness which reduces the welfare of households and ultimately reduces economic growth. This paper presents the determinants of the household debt in South Africa and comes up with a framework of recommendations on how to manage household debt. The objectives are achieved through systematic literature review, document analysis and secondary data analysis. Our findings suggest that households are over-indebted because they lack the necessary finance management skills, lack proper protection from the predatory practices by lenders and fail to obtain disclosure of vital information pertaining credit which affects their decision to borrow. Household indebtedness is also caused by the rising cost of living and low household disposable income, low household savings, high interest rates, misfortunes or adverse trigger events and living in urban areas. Education, age and being a recipient of a social grant all have positive and negative impacts on household indebtedness. Findings also suggest that female-headed households, renting households, large households, households with a mortgage and households where head is not working, is sick or disabled are more likely to be over-indebted. We develop a framework with recommendations for managing household debt in South Africa. We recommend upskilling to help households to effectively manage their finances and take responsibility. Moneylending institutions are encouraged to disclose vital information pertaining credit which affects decision to borrow by households and to avoid predatory lending. We also recommend a review of interest rates on debt and availability of consumption insurance on all loans to cover for cases when the household faces unforeseen circumstances affecting repayment.

scholarly journals Personal Over-indebtedness in Croatia and Measures for its Reduction

2016 ◽  
Vol 19 (1) ◽  
pp. 45-58
Author(s):  
Predrag Bejaković
Keyword(s):  
Interest Rates ◽  
Financial Stability ◽  
Household Debt ◽  
Additional Increase ◽  
Debt Burden ◽  
Household Disposable Income ◽  
Individual Household ◽  
Vulnerability Indicator ◽  
Real Growth ◽  
Insight Into

Abstract The robust growth in household debt in pre-crisis period coincided with real growth in household disposable income, large economic expansion and a considerable fall in banks’ interest rates. However, household debt indicators deteriorated markedly as total household debt grew faster than income. This raised concerns about potential implications of an additional increase in the debt burden on financial stability. An analysis of household debt based exclusively on data aggregated at the sector level is not a best financial vulnerability indicator as it fails to provide insight into the distribution of debt and credit risk by individual household groups. The text explains the problems with personal over-indebtedness in Croatia and measures for their reduction.

The impact of interest rates on household debt accumulation in Malaysia: a structural break analysis

2020 ◽  
Vol 19 (2) ◽  
pp. 193
Author(s):  
Hafizah Hammad Ahmad Khan ◽  
Hussin Abdullah ◽  
Shamzaeffa Samsudin
Keyword(s):  
Interest Rates ◽  
Structural Break ◽  
Household Debt ◽  
Debt Accumulation ◽  
The Impact

Income inequality, equities, household debt, and interest rates: Evidence from a century of data

2018 ◽  
Vol 80 ◽  
pp. 1-14 ◽  
Author(s):  
Edmond Berisha ◽  
John Meszaros ◽  
Eric Olson
Keyword(s):  
Income Inequality ◽  
Interest Rates ◽  
Household Debt
Sign in / Sign up

Export Citation Format

Share Document