Up-tick in new credit extension
Media Release December 2015
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 September 2015.
Nomsa Motshegare, CEO of the NCR, states that the number of applications for credit decreased by 2.37% quarter-on-quarter from 12.13 million in June 2015 to 11.85 million in September 2015. There was, however, more credit approvals for the quarter ended September with a rejection rate of 52.7% compared to 56.0% in the previous quarter. Total value of new credit granted increased by 10.35% quarter-on-quarter from R112.31 billion to R123.93 billion. All credit types experienced a positive quarter-on-quarter and year-on-year growth and mortgages had a second successive positive growth of 8.5%.
Motshegare says if consumers want to begin the new year in a financially sound position, they need to be aware of how they spend their money during this period and they should provide for typical beginning of the year expenses such as school fees, school uniform, stationery etc.
The following were some of the most significant trends observed in terms of credit granted for the quarter ended September 2015:
- The value of new mortgages granted increased by R3.10 billion (8.53%) quarter-on-quarter and R2.50 billion (6.77%) year-on-year.
- Secured credit, which is dominated by vehicle finance, increased by R2.85 billion (7.83%) quarter-on-quarter and by R2.80 billion (7.68%) year-on-year.
- Credit facilities increased by R459.87 million (2.29%) quarter-on-quarter and R787.15 million (4.70%) year-on year.
- Unsecured credit increased by R3.21 billion (18.40%) quarter-on-quarter and increased by R2.42 billion (13.28%) year-on year.
The total outstanding consumer credit balances (or gross debtor’s book) as at September 2015 was R1.63 trillion, representing an increase of 0.48% quarter-on-quarter and 4.09% year-on-year. The trends for outstanding balances for the quarter ended September 2015 were as follows:
- Mortgages debtor’s book increased by R5.30 billion (0.62%) for the quarter ended September 2015, and R27.86 billion (3.34%) on a year-on-year basis.
- Secured credit debtor’s book increased by R4.26 billion (1.19%) for the quarter ended September 2015. On a year-on-year basis the book grew by R20.46 billion (6.00%).
- Credit facilities debtor’s book increased by R507.63 million (0.24%) for the quarter ended September 2015, and R14.22 billion (7.19%) on a year-on-year basis.
- Unsecured credit debtor’s book decreased by R918.53 million (0.56%) for the quarter ended September 2015 and R8.04 billion (4.73%) on a year-on-year basis.
Credit bureaus held records for 23.45 million credit-active consumers, an increase of 0.3% when compared to the 23.37 million in the previous quarter. Consumers classified in good standing increased by 692,000 to 13.53 million consumers. As a percentage of the total number of credit-active consumers at 57.7%, this reflects a decrease of 2.8% quarter-on-quarter and 2.4% year-on-year.
The number of consumers with impaired records has decreased by 618,000 from 10.53 million to 9.91 million. The number of accounts decreased from 82.17 million in the previous quarter to 80.60 million for the quarter ended September 2015. The number of impaired accounts decreased from 21.71 million to 20.24 million when compared to the previous quarter, a decrease of 1.47 million quarter-on-quarter and 1.40 million year-on-year.
A total of 376.04 million enquiries were made on consumer credit records, a decrease of 8.9% quarter-on-quarter and 0.9% year-on-year. Enquiries initiated by consumers accounted for 15.79 million of all enquiries, an increase of 19.4% quarter-on-quarter and 5.5% year-on-year. The number of credit reports issued to consumers increased to 163,118. Of the total credit reports issued, 64.2% (104,683) were issued without charge, and the remaining 35.8% (58,435) were issued with charge. There were 28,856 disputes lodged on information held on consumer credit records for the quarter ended September 2015, an increase of 3.1% quarter-on-quarter and 23.7% year-on-year.
Motshegare commented that “for those consumers who will be borrowing money, they should only borrow for what is strictly necessary, and ensure that they can afford the repayments”. She encouraged consumers to be wary of “buy now, pay later” deals as they will incur additional credit during that period.
Comparisons in this release- ‘quarter-on-quarter’ refers to a comparison between the June 2015 and September 2015 quarters, and ‘year-on-year’ refers to a comparison between the September 2014 and September 2015 quarters.
National Credit Regulator
Tel: (011) 554 – 2722