Asymmetric impact of stokvel and banking sector efficiency in South Africa: Evidence from non-linear ARDL approach
DOI:
https://doi.org/10.21580/al-arbah.2024.6.2.23068Keywords:
stokvels savings, banking sector efficiency, asymmetry, NARDL, South Africa.Abstract
This study examines the impact of stokvel savings and banking sector efficiency in South Africa using the non-linear autoregressive distributed lag (NARDL) bound testing approach technique with economic time series data ranging from 2009Q4 to 2020Q2. The NARDL results shows that positive and negative shocks on banking sector efficiency exhibited a positive influence on stokvel savings. An improvement in banking sector efficiency would result in an increase in stokvel savings of approximately 0.33%, while a decline in banking sector efficiency would lead to increase in stokvel savings albeit at a marginally reduced level of approximately 32%. The results are statistically significant at 1% and 5% for a positive shock and a negative shock respectively. Insignificant results obtained when using gross domestic product growth as dependent variable. This implies that the N-ARDL is not an appropriate model for estimating GDPG. Statistically significant results were found at 5% when using money supply.
Downloads
References
Ahmad, M., & Asghar, T. (2004). Estimation of saving behaviour in Pakistan using micro data. Lahore Journal of Economics, 9(2), 73–92.
Aidoo-Mensah, D. (2018). Savings and income relationships among households: A review of the literature. Agricultural Social Economic Journal, 18(3),133–143. https://doi.org/10.21776/ub.agrise.2018.018.3.6
Anandalakshmy, A., Hamsini Aathreya, S., Keerthana, M., Nanhini, B., & Dhanyasree, A. (2019). Retail banking and services. Pramana Reserch Journal, 9(6), 1691–1699.
Bannour, B., & Labidi, M. (2013). Efficiency of the Tunisian Trade Banks: Study by the Stochastic Frontier Approach. Panoeconomicus, 60(1),103–132. https://doi.org/10.2298/PAN1301103B
Bashir, F., & Faridi, M.Z. (2011). Saving behavior among different income groups in Pakistan: A micro study. International Journal of Humanities and Social Science, 1(10), 268–277.
Bayoumi, T., & Masson, P.R. (1995). Fiscal flows in the United States and Canada: Lessons for monetary union in Europe. European Economic Review, 39(2), 253–274. https://doi.org/10.1016/0014-2921(94)E0130-Q
Beck, T., Kibuuka, K., & Tiongson, E. (2010). Mortgage finance in Central and Eastern Europe: Opportunity or burden? World Bank Policy Research Working Paper 5202, 1–90.
Bophela, M.J.K., & Khumalo, N. (2019). The role of stokvels in South Africa: A case of economic transformation of a municipality. Problems and Perspectives in Management, 17(4), 26–37. https://doi.org/10.21511/ppm.17(4).2019.03
Chandio, A.A., Wei, F., & Yuansheng, J. (2015). Role of savings in economic growth of Pakistan. Asian Journal of Empirical Research, 5(12), 243–251.
Cheruiyot, P.K., Cheruiyot, J.K., & Yegon, C.K. (2016). A study on operations and impact of rotating savings and credit associations: Case of middle income earners in Embakasi Nairobi, Kenya. International Journal of Economics, Commerce and Management, 4(5), 871–897.
Chinweoke, N., Onydikachi, M., & Elizabeth, N.C. (2014). Financial intermediation and economic growth in Nigeria (1992–2011). The Macrotheme Review, 3(6), 124–142.
Chineka, T. S., & Mtetwa, E. (2021). Savings and credit schemes (SCSs): Towards an informal sector poverty alleviation strategy for Zimbabwe. African Journal of Social Work, 11(6), 403–411.
Chipote, P., & Tsegaye. A. (2014). Determinants of household savings in South Africa: An econometric approach (1990-2011). Mediterranean Journal of Social Sciences, 5(15), 183–190. https://doi.org/10.5901/mjss.2014.v5n15p183
Damodaram, A. (2013). Financial Inclusion: Issues and Challenges. AKGEC International Journal of Technology, 4(2), 54-59.
Demirgüç-Kunt, A., & Levine, R. (2008). Finance, financial sector policies, and long-run growth. Policy Research Working Paper Series, 4469. The World Bank. https://doi.org/10.1596/1813-9450-4469
Djalilov, K., & Hölscher, J. (2016). Comparative analyses of the banking environment in Transition Countries. Ekonomski Anali , 7(25), 1–20. https://doi.org/10.2298/EKA1608007D
Ewa, U., Adebisi, A.W., David, O.M., & Arikpo, O.F. (2020). Deposit money banks services and economic growth in Nigeria. International Journal of Finance and Accounting, 9(2), 31–41. https://doi.org/10.5923/j.ijifa.20200902.02
Floro, M.S., & Seguino, S. (2002). Gender effects on aggregate saving. Policy Research Report on Gender and Development. Working Paper Series, 23.
Freixas, X., & Rochet. J. (2008). Microeconomics of banking. Cambridge, MA: MIT Press.
Giovannini, A., Lacopetta, M., & Minetti, R. (2013). Financial markets, banks and growth: Disentangling the links. Revue de I’OFCE, Presses de Sciences-Po, 0(5), 105–147.
Gurley, J.G., & Shaw, E.S. (1960). Money in a theory of finance. Washington DC: Brookings Institution.
Jagadeesh, D. (2015). The impact of savings in economic growth: An empirical study based on Botswana. International Journal of Research in Business Studies and Management, 2(9), 10–21.
Jones, S., & Verhoef, G. (2006). Financial intermediaries in settler economies: the role of the BSD in South Africa, 1850-2000. Paper presented in Session 97: Settler Societies in World History, International Economic History Association, Helsinki, University of the Witwatersrand and University of Johannesburg. South Africa, 1–40. August.
Landman, M., & Mthombeni, M. (2021). Determining the potential of informal savings groups as a model for formal commitment saving devices. South African Journal of Economic and Management Sciences, 24(1).
Kafayat, A. (2013). Savings and economic growth in South Africa: A multivariate analysis. Journal of Economic and Financial Sciences, 7(1), 73–88. https://doi.org/10.22610/jebs.v5i4.395
Kaseke, E., & Matuku, S. (2014). The role of stokvels in improving people’s lives: The case in Orange Farm, Johannesburg, South Africa. Social Work/Maatskaplike Werk, 50(4). https://doi.org/10.15270/50-4-388
Kaseke, E., & Olivier, M.P. (2008). Informal social security. International Conference on Social Security organized by the National Department of Social Department. South Africa, 10-14 March, Cape Town.
Kumarasinghe, P.J., & Munasinghe, S.C. (2016). The savings motives: With special reference to households in Kalutara District. 13th International Conference on Business Management, University of Sri Jayewardenepura, 367–377.
Levine, R. (1997). Financial development and economic growth: Views and agenda. Journal of Economic Literature, 35, 688–726. Mashigo, M.P. (2012). The lending practices of township micro-lenders and their impact on the low-income households in South Africa: A case study for Mamelodi township. New Contree, 65 (12).
Mashigo, P., & Kabir, H. (2016). Village banks: A financial strategy for developing the South African poor households. Banks and Bank Systems, 11(2), 8–13. https://doi.org/10.21511/bbs
Mashigo, M.P., & Schoeman, C. (2012). Stokvels as an instrument and channel to extend credit to poor households in South Africa. Journal of Economic and Financial Sciences. 5(1), 49–62. https://doi.org/10.4102/jef.v5i1.305
Mashigo, P., & Kabir, H. (2016). Village banks: A financial strategy for developing the South African poor households. Banks and Bank Systems, 11(2), 8–13. https://doi.org/10.21511/bbsMboweni, T.T. (1990). Stokvels in South Africa: Informal savings schemes by blacks for the black community. Johannesburg: Amagi Books.
Mierau, J. O., & Mink, M. (2013). Are stock market crises contagious? The role of crisis definitions. Journal of Banking and Finance, 37(12), 4765–4776.
Mogale, I.P., Mashamaite, T., & Khoza, N. (2018). Household savings, financing and economic growth in South Africa. Business and Economic Horizons, 14(1), 105–116. http://doi.org/10.15208.beh.2018.9
Moliea, H. (2007). Stokvels as alternative microfinance institutions: Conversions with women from Venda. Master of Business Administration. University of Pretoria, Pretoria, South Africa. Available from: http://hdl.handle.net/2263/23463 (Accessed 14 June 2018)
Molopo, S., & Damane, M. (2017). An econometric approach to private sector credit in Lesotho. Journal of Business in Developing Nations, 15(1), 32–54.
Ngcobo, L., & Chisasa, J. (2018a). Characteristics of credit instruments issued by stokvels in South Africa. Journal of Economics and Behavioural Studies (JEBS), 10(6), 240–250.
Nyandoro, M. (2018). Defying the odds, not the abuse: South African women’s agency and rotating savings schemes, 1994-2017. Journal of International Women’s Studies, 19(5), 177–192. https://vc.bridgew.edu/jiws/vol19/iss5/12
Ogbokor, C.A (2014). A time series analysis of the determinants of savings in Namibia. Journal of Economics and Sustainable Development, 5(8), 52–63.
Oji, C.K. (2015). Promoting financial inclusion for inclusive growth in Africa. Occasional paper 210. Economic Diplomacy Programme. February. SAIIA. https://www.saiia.org.za/occasional-papers/promoting-financial-inclusion-for-inclusive-growth-in-africa/
Omodero, C.O. (2019). Effect of money supply on economic growth: A comparative study of Nigeria and Ghana. International Journal of Social Science Studies, 7(3), 16–23. https://doi.org/10.11114/ijsss.v7i3.4137
Pesaran, M.H.; Shin, Y., & Smith, R. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.
Pitonáková, R. (2018). Private sector savings. DANUBE: Law, Economics and Social Issues Review, 9(1), 1–17. https://doi.org/10.2478/danb-2018-0001
Ribaj, A., & Mexhuani, F. (2021). The impact of savings on economic growth in a developing country (the case of Kosovo). Journal of Innovation and Entrepreneurship, 10(1), 1–13. https://doi.org/10.1186/s13731-020-00140-6.
Samantaraya, A., & Patra, S.K. (2014). Determinants of household savings in India: An empirical analysis using ARDL approach. Economics Research International, 454675, 1–8. http://doi.org/10.1155/2014/454675
Sambo, I. (2019). IEB Essay-unemployment, inequality and poverty in South Africa. Conference: IEB CLASS University of Western Cape, 1–6. https://doi.org/10.13140/RG.2.2.18812.39040
Sawuyah, N. (2018). Micro analysis of the determinants of household savings: Empirical evidence from Uganda. International Journal of Innovative Research and Development, 7(1), 312–322. http://doi.org/10.24940/ijird/2018/v7/i1/JAN18078
Shuaib, S.N. (2018). Informal financial institutions: A source of soft loans to individuals and small business owners. Master of Business Administration Research proposal. Ibrahim Badamasi Babangida University, Lapai-Niger State. 1-13. https://doi.org/10.131140/RG.2.2.19876.73609
Simleit, C., Keeton, G., & Botha, F. (2011). The determinants of household savings in South Africa. Journal for Studies in Economics and Econometrics, 35(3), 1–20. https://doi.org/10.1080/10800379.2011.12097228
Storchi, S. (2018). Impact evaluation of savings groups and stokvels in South Africa. The economic and social value of group-based financial inclusion. Fin Mark Trust, October. www.finmark.org.za/wp-content/uploads/2018/11/fmt-
Sulaiman, L.A., & Aluko, O.A. (2015). Financial intermediation and economic growth: A test for causality in Nigeria. Banks and Bank Systems, 10(4), 69–74.
Tenenbaum, H. (2021). What is hiding behind the money accumulating in Utah? Environment and Planning A: Economy and Space, 53(8), 1879–1895. https://doi.org/10.1177/0308518X211041371
Tsaurai, K. (2018). An empirical study of the determinants of BSD in the SADC countries. The Journal of Developing Areas, 52(1), 71–84.
ur Rehman, H., Faridi, M.Z., & Bashir, F. (2010). The savings motives: With special reference to households in Kalutara District. Pakistan Journal of Social Sciences (PJSS), 30(1), 17–29.
Van Wyk, M. (2017). Stokvels as a community-based saving club aimed at eradicating poverty: A case of South African rural women. The International Journal of Community Diversity, 17(2), 14–26.
Verhoef, G. (2001a). Savings and survival in a modern African economy: Informal savings organisations and poor people in South Africa. Historia, 46(2), 519–542.
Verhoef, G. (2001b). Informal financial service institutions for survival: African women and stokvels in urban South Africa, 1980-1988. Enterprise and Society, 2(2), 259–296.
Verhoef, G. (2008). Social capital in voluntary savings organisations in South Africa in historical perspective. New Contree, 56(1), 51–79.
Visagie, J. (2013). Who are the middle class in South Africa? Does it matter for policy? Econ 3x3. Available from: www.econ3x3.org
Wamuyu, P. (2016). Promoting savings among low income earners in Kenya through mobile money. IST-Africa 2016 Conference Proceedings, IIMC International Information Management Corporation. Available from: https://www.ist-africa.org/Conference2016
Zwane, T.T., Greyling, L., & Maleka, M. (2016). The determinants of household savings in South Africa: A panel data approach. International Business & Economics Research Journal (IBER), 15(4), 209–218. https://doi.org/10.19030/iberv15i4.9758
Downloads
Published
Issue
Section
License
Authors who publish with this journal agree to the following terms:
Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
Licensing
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
.png)
