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FINANCE: Positive Growth in Consumer Credit


Recent Gauteng Business News

The National Credit Regulator (NCR) released its fourth ‘Consumer Credit Report’ which is based on data submitted to it by registered credit providers. This fourth edition covers credit market information from September 2008 up to September 2009.

The total value of new credit granted increased from R50,92 billion in the quarter ended June 2009 to R53.73 billion for the quarter ended September 2009 , an increase of 5.51% compared to the previous quarter, though still a decline of 25.71% compared to the previous year. This indicates that after a period of ongoing decline in the volume of credit granted, credit volumes may have stabilized.

The number of consumers applying for credit increased by 4.13% when compared to the quarter ended June 2009. The number of consumers been declined for credit has been stable at the 44%.

The following were some of the most significant trends:
• The value of new mortgages granted increased by 0.89% from R17.66 billion in June 2009 to R17.82 billion in September 2009;
• Secured credit which mostly consists of vehicle finance, showed an increase from R18.78 billion in June 2009 to R20.33 billion in September 2009 (a quarter on quarter increase of 8.23%);
• Unsecured credit increased from R7.17 billion in June 2009 to R8.37 billion in September 2009 (a quarter on quarter increase of 16.77%);
• Individuals who earn gross monthly income of more than R15, 000 per month received on average 80% of the mortgages granted over the period September 2008 to September 2009.

As at September 2009, the total outstanding consumer credit balances (or gross debtors’ book) was R1.14 trillion. The breakdown was as follows: Mortgages accounted for R736.57 billion (64.43%); “Secured credit agreements” was R214.09 billion (18.73%); Credit facilities were R140.01 billion (12.25%); unsecured credit was R51.92 billion (4.54%); and short term credit was R597.96 million (0.05%).

The banks’ share of the total outstanding consumer credit as at September 2009 was R1, 02 trillion (89.64%) with the retailers at R37, 48 billion (3.28%), non-bank vehicle financiers at R36, 71 billion (3.21%) and “Other credit providers” at R44, 32 billion (3.88%). Other credit providers consist primarily of pension backed lenders, insurers, non-bank mortgage lenders and securitized debt.

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