Capitec, in September last year, said it would reduce interest rates on longer-term unsecured loans from 28% to about 20% over the next five years.
African Bank’s plight seemed to come as a shock, but banks started tightening up credit a year ago.
The evolution of peer-to-peer lending platforms has given small businesses another way to access financing despite renewed lending scrutiny.
Head of the country’s largest unsecured lender, Leon Kirkinis, has stepped down with immediate effect as the bank plans a capital increase.
Thanks to increased caution, SA banks have managed to decrease impairments in the past year.
The unsecured lender’s interim results show a loss of R4.4-billion as its customers struggle to repay loans.
The country’s second largest lender of unsecured loans is setting aside more money for bad debt as mine strikes and a slow economy hit consumers.
Old Mutual has halted bond purchases from unsecured lenders, while Futuregrowth Asset Management will "wind down’ holdings of bonds with the lenders.
The second largest player in the unsecured lending credit sector reports a 20% increase in first half earnings.
South Africa’s biggest unsecured lender is rated highly despite increasing bad debt
The uptick in credit sector has been driven by the demand for unsecured loans, but the reserve bank is not concerned.