Renewed confidence sees rise in consumer credit

The latest National Credit Regulator (NCR) statistics indicate a 13.36% increase in new credit granted to consumers as compared to June 2011, acting NCR chief executive Nomsa Motshegare announced on Wednesday.

With the inclusion of credit providers previously not reported on, however, the total new credit granted equates to 16.24%.

The NCR has noted a continued increase in unsecured lending which may in part be attributed to the additional credit providers that were previously not reported on.

The regulator has further noted a 0.71% increase in mortgages granted (as a percentage of total credit granted) for the quarters ended September 2011 and June 2011. The proportion of new mortgages granted, has rapidly declined from 51.91% in December 2007 to 30.62% in September 2011.

The NCR released its Consumer Credit Market Report which is based on data submitted to it by registered credit providers. This edition covers credit market information from September 2010 to September 2011.

The total value of new credit granted increased from R85.08-billion for the quarter ended June 2011 to R98.90-billion for the quarter ended September 2011.

The number of applications received for credit increased by 1.67-million from 6.64-million in June 2011 to 8.31-million in September 2011 an increase of 25.19% (an increase of 20.83% when compared to the same period last year).

The following were some of the most significant trends observed for the quarter ended September 2011:

  • The value of new mortgages granted increased by 18.98% quarter-on-quarter from R25.45-billion to R30.28-billion;
  • Secured credit, which is dominated by vehicle finance, showed an increase from R26.96-billion for June 2011 to R30.78-billion for September 2011 (a quarter-on-quarter increase of 14.16%);
  • Unsecured credit increased from R18.95-billion for June 2011 to R21.21-billion for September 2011 (a quarter-on-quarter increase of 11.92%);
  • Credit facilities which mainly consists of credit cards, store cards and bank overdrafts increased by 23.36% quarter-on-quarter from R12.06-billion to R14.88-billion;
  • Short term credit showed a quarter-on-quarter increase of 5.72% from R1.65-billion to R1.75-billion;
  • Individuals with a gross monthly income of more than R15 000 received on average 82% of the number of mortgages granted over the period September 2010 to September 2011.

As at September 2011, the total outstanding consumer credit balances (or gross debtors’ book) was R1.27-trillion representing a quarter on quarter growth of 3.24%. The breakdown was as follows: mortgages accounted for R786-billion (62.06%); secured credit was R240.61-billion (19.00%); credit facilities were R138.02-billion (10.90%); unsecured credit was R101.10-billion (7.98%), short-term credit was R816.71-million (0.06%).

The banks’ share of the total outstanding consumer credit as at September 2011 was R1.12-trillion (88.37%) with the retailers at R38.97-billion (3.08%), non-bank vehicle financiers at R41.87-billion (3.31%) and “other credit providers” at R66.41-billion (5.24%). Other credit providers consist primarily of pension-backed lenders, insurers, non-bank mortgage lenders and securitised debt. — I-Net Bridge

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