Faculty of Commerce, Law and Management (ETDs)

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    The perceived influence of digital banking on the financial wellness of the South African middle-class
    (University of the Witwatersrand, Johannesburg, 2024) Mabasa, Tiyiselani Innocent; Anning-Dorson, Thomas
    This study explores the impact of digital banking on the financial wellness of the South African middle class. Using online questionnaires, quantitative research methods are employed to gather data on digital banking adoption, perceived financial wellness, easy access to credit, and prior exposure to digital marketing strategies among middle- class individuals. Data analysis encompasses the use of descriptive statistics, correlation analysis, and regression analysis to examine the relationships between variables and draw relevant conclusions. This study aims to enhance comprehension of the perceived impact of digital banking on the financial wellness of middle-class South Africans by addressing specific research goals. The study found that autonomous and controlled motivation had a positive impact on the individual's financial wellness; it further highlighted that personalised credit offers contributed positively towards their financial wellness, despite the fact that convenient access to credit is a significant factor in the adoption of digital banking but not the sole determinant factor.
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    Risk-based pricing of financial products
    (2022) Mukatuni, Awelani Lynn
    This is an analytical research that aims to contribute to the discussions around risk-based pricing of financial products. It aims at contributing a better understanding of the risk-based pricing model, its pros and cons, and areas of improvement in the consumer credit environment. The study uses real-life data and the risk-based pricing model to analyse suitable credit prices that would allow more people to afford taking up credit. The study uses the relationship between price sensitivity and the offered interest rate to support offered credit prices. The study also aims to analyse the national credit act regulations on the maximum interest rate that an institution can offer. The study includes sample calculations that were drawn from Standard and Captec banks under the assumption that the two banks are using the risk-based pricing model. The results revealed that the model allows for more borrowers to have access to credit by allowing lenders to charge a high interest rate to high-risk borrowers. The model rewards low risk borrowers and compensates lenders for extending credit to high-risk borrowers. An analysis of the National Credit Act (NCA) revealed that it allows for banks and borrowers to maximise profit and marginalise a great number of borrowers at the same time. Due to its simplicity, the NCA becomes a good model to use as a basis for offering interest rates for high-risk borrowers, thus increasing the number of borrower classes.
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    Tax deductibility of interest and finance charges: the real cost of credit
    (2017) Haines, Chantelle
    Borrowers will commonly incur various finance charges when acquiring loan funding, which may include, inter alia, interest expenditure, guarantee fees, introduction fees, commitment fees and service fees. The tax deductibility of these finance charges is an important consideration for borrowers. Prior to the amendment of the definition of ‘interest’ in section 24J of the Income Tax Act 58 of 1962 (as amended), related finance charges were deductible for tax purposes. The term related finance charges was interpreted very widely by the Supreme Court of Appeal in C:SARS v South African Custodial Services (Pty) Ltd1 to include guarantee fees, introduction fees, commitment fees and even selected service fees. It is submitted that following the recent amendment of the interest definition by the Taxation Laws Amendment Act 15 of 2016, to now allow the deduction of ‘similar finance charges’ rather than ‘related finance charges’ the tax treatment of finance charges are uncertain. The objective of this study is to evaluate how this amendment will affect the deductibility of finance charges incurred by borrowers for tax purposes. The study proposes to first evaluate whether finance charges will be deductible in terms of section 24J, consider the definition of ‘interest’ and provide some general tests aimed at assessing the ‘trade requirement’ and the meaning of the phrase ‘in production of income’. The impact of the anti-avoidance legislation in sections 8F and 8FA will be considered, and finally, a brief discussion of the deductibility of finance charges in terms of the general deduction formula in section 11(a) read with section 23(g).