Original Research
A proposed quantitative credit-rating methodology for South African provincial departments
Submitted: 03 December 2014 | Published: 13 May 2016
About the author(s)
Erika Fourie, North West University, Centre for Business Mathematics and Informatics, South AfricaTanja Verster, North West University, Centre for Business Mathematics and Informatics, South Africa
Gary Wayne van Vuuren,, United Kingdom
Full Text:
PDF (583KB)Abstract
The development of subnational credit-rating methodologies affords benefits for subnationals, the sovereign and its citizens. Trusted credit ratings facilitate access to financial markets and above-average ratings allow for the negotiation of better collateral and guarantee agreements, as well as for funding of, for example, infrastructure projects at superior (lower) interest rates. This paper develops the quantitative section of a credit-rating methodology for South African subnationals. The unique characteristics of South African data, their assembly, and the selection of dependent and independent variables for the linear-regression model chosen, are discussed. The methodology is then applied to the provincial Department of Health using linear regression modelling.
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Crossref Citations
1. Development and comparison of payment behaviour prediction models for two South African state departments
Erika Fourie, Tanja Verster, Gary W. Van Vuuren
South African Journal of Economic and Management Sciences vol: 20 issue: 1 year: 2017
doi: 10.4102/sajems.v20i1.1701