FRK 122
CHAPTER 9: CREDIT
MANAGEMENT
DEFINITION OF CREDIT:
Medium of exchange that makes it possible to get goods/services/money in the
present on the basis of a promise to pay for it in the future.
ORIGIN OF THE WORD “CREDIT”:
Derived from Latin word “creditum” which means trust.
The seller provides goods/services NOW to the buyer who promises to pay in
the future.
CYCLE OF A CREDIT TRANSACTION:
, DIFFERENT TYPES OF CREDIT:
Consumer Credit • Bank overdraft; Mortgage loans; Personal loan; Credit card;
Instalment credit; Open accounts; Revolving credit
Business Credit • Trade credit (Entities trade goods/services between each other)
• Financial credit (Borrowings to finance entity’s capital
requirements)
Export Credit • When an entity sells goods on credit to an entity in another
country
IS CREDIT AN ECONOMIC DRIVER?
Private sector credit growth hits a soft patch in July
BL PREMIUM
30 AUGUST 2018 - 08:40 ANDRIES MAHLANGU
Household debt and consumption moderately higher in 4th quarter of 2018.
Mar 20 2019 11:16 Tehillah Niselow, Fin24
Surprise drop in vehicle exports in May Domestic sales fell an annualised 5.7% while exports
fell 8.8% 03 JUNE 2019 - 16:58 ODWA MJO
IS CREDIT RISKY FOR AN ECONOMY?
"While unsecured lending bore fantastic results for companies such as
Steinhoff and [former] African Bank (Abil) in the short term, it should be plainly
apparent that this model is unsustainable and inevitably leads to collapse,"
warned Jordan – Karin Smith,Fin 24, 26 Jan 2018 .
Credit and store debt 120 days in arrear approaching R 18bn NCR – Dec 2017 -
Karin Smith, Fin 24, 26 Jan 2018.
CHAPTER 9: CREDIT
MANAGEMENT
DEFINITION OF CREDIT:
Medium of exchange that makes it possible to get goods/services/money in the
present on the basis of a promise to pay for it in the future.
ORIGIN OF THE WORD “CREDIT”:
Derived from Latin word “creditum” which means trust.
The seller provides goods/services NOW to the buyer who promises to pay in
the future.
CYCLE OF A CREDIT TRANSACTION:
, DIFFERENT TYPES OF CREDIT:
Consumer Credit • Bank overdraft; Mortgage loans; Personal loan; Credit card;
Instalment credit; Open accounts; Revolving credit
Business Credit • Trade credit (Entities trade goods/services between each other)
• Financial credit (Borrowings to finance entity’s capital
requirements)
Export Credit • When an entity sells goods on credit to an entity in another
country
IS CREDIT AN ECONOMIC DRIVER?
Private sector credit growth hits a soft patch in July
BL PREMIUM
30 AUGUST 2018 - 08:40 ANDRIES MAHLANGU
Household debt and consumption moderately higher in 4th quarter of 2018.
Mar 20 2019 11:16 Tehillah Niselow, Fin24
Surprise drop in vehicle exports in May Domestic sales fell an annualised 5.7% while exports
fell 8.8% 03 JUNE 2019 - 16:58 ODWA MJO
IS CREDIT RISKY FOR AN ECONOMY?
"While unsecured lending bore fantastic results for companies such as
Steinhoff and [former] African Bank (Abil) in the short term, it should be plainly
apparent that this model is unsustainable and inevitably leads to collapse,"
warned Jordan – Karin Smith,Fin 24, 26 Jan 2018 .
Credit and store debt 120 days in arrear approaching R 18bn NCR – Dec 2017 -
Karin Smith, Fin 24, 26 Jan 2018.
