What else can we talk about with credit risk there is something known as a recovery or as collateral so what will happen is let’s say you go to the bank and you say I want to take out a bond or I need a loan of say a hundred thousand rand they’ll say that’s great mr. Jordan we’ll give you your hundred thousand Rand however if you don’t repay it we’re going to take away your house we’re going to repossess it or we’re going to take your car and we’re going to use it as collateral but now the is it’s not that simple okay let’s say I default and the bank comes and takes away my house there’s a lot of legal things that they have to go through they can’t just come in and kick me out.

They first have to get some thing from the law and it is quite a bit of a mission also they then need to try and sell this house that’s going to take a delay I mean houses aren’t that marketable they’re not as liquid of an acid they might have to sell it for a little bit less maybe sell it for 70,000 which means they aggressively sell for 7,000 they cost or 20,000 which means overall the recovery is only 50,000 which means they still have an amount of a hundred thousand at risk and there’s all these extra effort and stuff that has to go into it so don’t think oh I can remove my credit risk by simply slapping on a collateral and that person could also I mean the house could have burnt down or they might have lied about it I mean there’s a lot of this gets messy you don’t want to you yeah taking collateral is yeah it’s what some people do is they sell that off to a debt collector you know those guys with big baseball bats that come in and let you see in the movies yeah it’s not a very pleasant business to be in from either the receiving end or the giving end finally

Here the average home loan interest rate.