The relationship between financial sector development and savings mobilisation in South Africa: An empirical study

Kapingura, Forget Mingiri; Alagidede, Paul

doi:10.1080/0376835x.2016.1203760

Cited by 9 publications

(11 citation statements)

References 22 publications

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“…As a proxy for the financial development, this study utilised domestic credit to the private sector (DCP). This is consistent with Kim and Wu (2008), Beck, Demirguc-Kunt and Levine (2000) and Kapingura and Alagidede (2016). Kapingura and Alagidede (2016) indicate that there are different views regarding the function of the financial sector development within the economy.…”

Section: Model Specificationsupporting

confidence: 85%

An Analysis of Sovereign Credit Ratings Impact on Financial Development in South Africa

Motseta¹,

Takawira

2021

JAFEE

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Purpose: The study analyses the effects of sovereign credit ratings on financial development in South Africa. This became important considering that the country has been receiving negative ratings of late. Design/Methodology/Approach: Quarterly data for the period 1994-2017 was analysed using the Auto-Regressive Distributed Lag (ARDL) cointegration model and its associated statistics. The Error Correction Model (ECM) was implemented to augment the results of ARDL analysing the short run dynamics. The model was chosen given the order of integration of the variables. Financial development was selected since it influences financial conditions and financial sector stability. Findings: The statistical results revealed that sovereign ratings positively influence financial variables that is in other words higher ratings are found to contribute positively to the growth of the financial development sector. Negative ratings are likely to affect the financial system as due to low access to external funding and exodus of investors, financial development is halted or decreased. Implications/Originality/Value: The results suggest that authorities need to consider the factors which are targeted by rating agencies and ensure that they perform as expected. Governments should focus on raising sovereign ratings and avoiding downgrades to boost financial development.

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Section: Model Specificationsupporting

confidence: 85%

An Analysis of Sovereign Credit Ratings Impact on Financial Development in South Africa

Motseta¹,

Takawira

2021

JAFEE

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“…In particular, South Africa has one of the lowest household savings rates equating to only 0.26% of household disposable income in 2017 (OECD, ; South African Reserve Bank, ). Household savings as a percentage of disposable income, and household net savings as a percentage of gross domestic product, have been trending downward in South Africa over the last three decades (Kapingura & Alagidede, ; South African Reserve Bank, ). A variety of factors have potentially contributed to South Africa’s low savings levels, including low levels of economic growth and increased access to credit as a result of financial liberalization (Harjes & Ricci, ; Odhiambo, ).…”

Section: Introductionmentioning

confidence: 99%

Financial capability and emergency savings among South Africans living above and below the poverty line

Reyers

2019

Int J Consumer Studies

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Emergency savings provide a buffer against financial shocks, particularly among low‐income households. Despite the importance of these funds in lessening financial hardship, many households have not set aside emergency funds. It has been suggested that financial capability may play a role in financial behaviour. Therefore, this study considers whether financial capability is associated with saving for emergencies and whether there are differences in factors that predict emergency savings behaviour among those living below and above the poverty line. Using data from a sample of South Africans, logistic regression is used to determine the predictors of emergency savings. The study finds that those with higher levels of financial capability, related to financial self‐efficacy and having access to a bank account, are more likely to have emergency savings compared with those with lower levels of financial capability. However, no evidence is found to suggest a relationship between objectively measured financial knowledge and emergency savings. Therefore, the findings suggest that self‐assessed financial ability, as measured by financial self‐efficacy, might be more important than objectively assessed ability in the context of individuals making responsible financial choices. Differences in the predictors of emergency savings for those living above and below the poverty line related to socioeconomic and demographic differences, whereas the same financial capability predictors were significant predictors in both samples. The study provides unique insights into the predictors of emergency savings in a developing market context and identifies the characteristics of those who are likely to be financially resilient to unexpected economic shocks. The importance of the broader financial capability construct in predicting emergency savings, for both those living above and below the poverty line, suggests that programmes aimed at encouraging emergency savings should focus on enhancing financial self‐efficacy and financial inclusion.

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“…Odhiambo (2008), unit root tests were done in order to establish the characteristics of time series data before the existence of a long run relationship between savings and financial development was estimated. Consistent with Kapingura and Alagidede (2016), this paper used Augmented Dickey Fuller (ADF) and Philips-Perron (PP) to check the stationarity of savings and financial development data and to find out the order of integration of the variables. Table 1 results show that both savings and credit to the private sector data sets were not stationary at level thus making it necessary to check for stationarity at first difference (see Table 2).…”

Section: Methodsmentioning

confidence: 99%

Savings Mobilization and Financial Development during the Multicurrency Regime Period in Zimbabwe

Tsaurai¹

2017

JEBS

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This paper seeks to investigate the relationship between savings and financial development in Zimbabwe using both autoregressive distributive lag (ARDL) and vector error correction model (VECM) approaches for comparison purposes with monthly time series data from January 2009 to August 2015. Four distinct hypotheses emerged from the literature and these are the savings-led financial development, financial development-led savings, feedback effect and the insignificant/no relationship hypothesis. The existence of diverging and contradicting views in empirical literature on the subject matter is evidence that the linkage between savings and financial development is still far from being concluded. Both F-Bounds and Johansen co-integration tests observed that there is a long run relationship between savings and financial development in Zimbabwe. What is even more unique about this study is that both ARDL and VECM noted the presence of a bi-directional causality relationship between savings and financial development in the short and long run in Zimbabwe. The implication of this study is that in order to increase economic growth, Zimbabwe authorities should increase savings mobilization efforts in order to boost financial development, which in turn attracts more savings inflow into the formal financial system.

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The relationship between financial sector development and savings mobilisation in South Africa: An empirical study

Cited by 9 publications

References 22 publications

An Analysis of Sovereign Credit Ratings Impact on Financial Development in South Africa

An Analysis of Sovereign Credit Ratings Impact on Financial Development in South Africa

Financial capability and emergency savings among South Africans living above and below the poverty line

Savings Mobilization and Financial Development during the Multicurrency Regime Period in Zimbabwe

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