Credit extension marginally slows down

The National Credit Regulator (NCR) today released the ‘Consumer Credit Market Report’ (CCMR) and the Credit Bureau Monitor (CBM), which are based on data submitted to the NCR by registered credit providers and credit bureaus respectively. The latest edition of the reports covers credit market information up to June 2016. The number of applications for credit decreased by 0.39% quarter-on-quarter from 9.99 million in March 2016 to 9.95 million in June 2016. The total value of new credit granted decreased marginally by 0.01% quarter-on-quarter from R108.33 billion to R108.32 billion.

The following were some of the most significant trends observed in terms of credit granted for the quarter ended June 2016:

  • The value of new mortgages granted increased by R2.75 billion (8.30%) quarter-on-quarter but decreased by R425.76 million (1.17%) year-on-year.
  • Secured credit, which is dominated by vehicle finance, increased by R1.79 billion (5.25%) quarter-on-quarter but decreased by R427.45 million (1.17%) year-on-year.
  • Credit facilities decreased by R1.26 million (9.44%) quarter-on-quarter and by R5.04 billion (29.49%) year-on year.
  • Unsecured credit increased by R1.73 billion (9.14%) quarter-on-quarter and by R3.16 billion (18.10%) year-on year.

The total outstanding consumer credit balances (or gross debtors book) as at June 2016 was R1.66 trillion, representing an increase of 0.31% quarter-on-quarter and 2.35% year-on-year. The trends for outstanding balances for the quarter ended June 2016 were as follows:

  • Mortgages debtors book increased by R2.70 billion (0.31%) for the quarter ended June 2016 and by R9.12 billion (1.06%) on a year-on-year basis.
  • Secured credit debtors book increased by R4.08 million (1.10%) for the quarter ended June 2016. On a year-on-year basis, the book grew by R17.52 billion (4.91%).
  • Credit facilities debtors book decreased by R206.14 million (0.09%) for the quarter ended June 2016 but increased by R7.47 billion (3.53%) on a year-on-year basis.
  • Unsecured credit debtors book decreased by R2.44 billion (1.48%) for the quarter ended June 2016 but increased by R49.37 million (0.03%) on a year-on-year basis.

Credit bureaus held records for 24.08 million credit-active consumers, an increase of 0.85% when compared to the 23.88 million in the previous quarter. Consumers classified in good standing increased by 79,000 to 14.41 million consumers. As a percentage of the total number of credit-active consumers at 59.84%, this reflects a decrease of 0.18% quarter-on-quarter but an increase of 4.91% year-on-year. The number of accounts decreased from 84.96 million in the previous quarter to 84.56 million for the same period. The number of impaired accounts increased from 19.92 million (23.45%) to 20.24 million (23.93%) when compared to the previous quarter, an increase of 314,000 quarter-on-quarter and 1.47 million year-on-year.

A total of 434.37 million enquiries were made on consumer credit records, an increase of 10.87% quarter-on-quarter and 5.23% year-on-year. Enquiries initiated by consumers accounted for 16.48 million of all enquiries, a decrease of 2.96% quarter-on-quarter and an increase of 24.62% year-on-year. The number of credit reports issued to consumers increased from 129,458 to 145,013. Of the total credit reports issued, 75.04% (108,818) were issued without charge, and the remaining 24.96% (36,195) were issued with charge. There were 33,989 disputes lodged on information held on consumer credit records for the quarter ended June 2016, an increase of 14.99% quarter-on-quarter and 21.44% year-on-year.

Nomsa Motshegare, CEO of the NCR has noted with concern the continuous deteriorating consumer credit health. She reminds consumers to draw-up a monthly budget, to keep track of their expenditure and to live within their means as we approach the festive season. Consumers who are already battling with their debt repayments are advised to approach their credit providers to find an alternative arrangement. Alternatively, over-indebted consumers can approach the nearest debt counsellor for assistance, concludes Motshegare.

Comparisons in this release- ‘quarter-on-quarter’ refers to a comparison between the March 2016 and June 2016 quarters, and ‘year-on-year’ refers to a comparison between the June 2015 and June 2016 quarters.