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Drivers of corporate credit in South Africa

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  • Kathryn Bankart
  • Xolani Sibande
  • Konstantin Makrelov

Abstract

Corporate credit growth remains strong despite tighter monetary policy and deteriorating global and domestic conditions. Current drivers of corporate credit, particularly general loans and advances, are normalising to pre-COVID levels as the need for working capital has increased, investment has picked up in particular sectors of the economy such as agriculture and passthrough from monetary policy actions has been limited. A simple econometric model suggests that investment is a major driver of corporate credit growth in the long-run, while lending spreads and government borrowing rates are important determinants in the short-run.

Suggested Citation

  • Kathryn Bankart & Xolani Sibande & Konstantin Makrelov, 2023. "Drivers of corporate credit in South Africa," Occasional Bulletin of Economic Notes 11047, South African Reserve Bank.
    • Handle: RePEc:rbz:oboens:11047
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    References listed on IDEAS

    as
    1. Hylton Hollander, 2024. "Debt-financed fiscal stimulus in South Africa," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 48(1), pages 87-112, January.
    2. Enrique G. Mendoza & Marco E. Terrones, 2008. "An Anatomy Of Credit Booms: Evidence From Macro Aggregates And Micro Data," NBER Working Papers 14049, National Bureau of Economic Research, Inc.
    3. Borio, Claudio & Zhu, Haibin, 2012. "Capital regulation, risk-taking and monetary policy: A missing link in the transmission mechanism?," Journal of Financial Stability, Elsevier, vol. 8(4), pages 236-251.
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