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Credit extension slows down Print E-mail
Wednesday, 25 June 2014

The National Credit Regulator (NCR) today released the ‘Consumer Credit Market Report’ (CCMR) and the Credit Bureau Monitor (CBM), based on the data submitted to the NCR by registered credit providers and credit bureaus respectively. This latest edition of the report covers credit market information up to March 2014. Nomsa Motshegare, CEO of the NCR, said that the statistics reported for the quarter ended March 2014 indicate a seasonal decline in the value of new credit extended to consumers. She also encouraged consumers to use credit responsibly and to live within their means.

The total value of new credit granted decreased by R13.06 billion (11.01%) from R118.66 billion for the quarter ended December 2013 to R105.60 billion for the quarter ended March 2014. There was an overall quarter-on-quarter decline for all credit types with the exception of “developmental” credit. The number of applications received for credit decreased by 1,076,000 from 10.75 million in December 2013 to 9.67 million in March 2014, a decrease of 10.02% quarter-on-quarter and a decrease of 4.41% year-on-year.

The following were some of the most significant trends observed in terms of credit granted:

·         The value of new mortgages granted decreased by 11.17% quarter-on-quarter from R34.72 billion to R30.84 billion.

·         Secured credit, which is dominated by vehicle finance, decreased from R40.58 billion for December 2013 to R35.35 billion for March 2014, a quarter-on-quarter decrease of 12.88%.

·         Credit facilities, consisting mainly of credit cards, store cards and bank overdrafts, had a decrease of 13.26% quarter-on-quarter from R18.70 billion to R16.22 billion.

·         Unsecured credit decreased from R21.61 billion for December 2013 to R18.82 billion for March 2014, a quarter-on-quarter decrease of 12.92%.

·         Short-term credit decreased from R1.38 billion for the quarter ended December 2013 to R1.23 billion for the quarter ended March 2014, a decrease of 10.83%.

·         Developmental credit had a quarter-on-quarter increase of 87.53% from R 1.68 billion to R 3.14 billion.

As at March 2014, the total outstanding consumer credit balances (or gross debtors’ book) was R1.55 trillion, representing a quarter-on-quarter growth of 2.04% and a year-on-year growth of 6.87%. The trends for outstanding balances for the quarter ended March 2014 were as follows:

·         Mortgages debtor’s book increased from R818.06 billion for the quarter ended December 2013 to R823.33 billion for the quarter ended March 2014, an increase of 0.64%.

·         Secured debtor’s book, which is dominated by vehicle finance, increased from R323.11 billion for December 2013 to R331.72 billion for March 2014, a quarter-on-quarter increase of 2.66%.

·         Credit facilities debtor’s book, which consists mainly of credit cards, store cards and bank overdrafts, had a quarter-on-quarter increase of 3.04% from R185.37 billion to R190.57 billion.

·         Unsecured credit debtor’s book increased from R170.75 billion for December 2013 to R172.97 billion for March 2014, a quarter-on-quarter increase of 1.30%.

·         Short-term credit debtor’s book decreased from R791.29 million for the quarter ended December 2013 to R707.343 million for the quarter ended March 2014, a decrease of 10.61%.

·         Developmental credit debtor’s book increased from R21.95 billion for the quarter ended December 2013 to R31.67 billion for the quarter ended March 2014, an increase of 44.27%.

The banks’ share of the total outstanding consumer credit as at March 2014 was R1.31 trillion (84.76%), retailers was R35.17 billion (2.27%), non-bank vehicle financiers at R56.71 billion (3.66%), and “other credit providers” at R144.44 billion (9.71%). Other credit providers consist primarily of pension-backed lenders, insurers, non-bank mortgage lenders and securitised debt.

Credit bureaus held records for 21.71 million credit-active consumers, an increase of 5.2% when compared to the 20.64 million in the previous quarter. Consumers classified in good standing increased by 1.40 million, to 12.11 million consumers. As a percentage of the total number of credit-active consumers at 55.8%, this reflects an increase of 3.9% quarter-on-quarter and 3.3% year-on-year. The number of consumers with impaired records increased from 9.93 million to 9.60 million for the quarter ended March 2014. As a percentage of the total number of credit-active consumers at 44.2%, this reflects a decrease of 3.9% quarter-on-quarter and 3.3% year-on-year.

The number of accounts increased from 73.18 million to 77.18 million, while the number of impaired accounts decreased from 19.74 million to 19.27 million compared to the previous quarter. A total of 333.66 million enquiries were made on consumer credit records, a decrease of 4.3% quarter-on-quarter and 15.4% year-on-year. Enquiries initiated by consumers accounted for 14.33 million of all enquiries, a decrease of 7.4% quarter-on-quarter and 6.1% year-on-year. Banks and other financial institutions accounted for 83.4% of total consumer records enquiries, retailers accounted for 3.6% and telecommunication providers accounted for 2.7%. Banks and other financial institutions’ enquiries decreased by 6.6% from the previous quarter, retailers increased by 16.3% and telecommunication providers decreased by 15.9%.

The number of credit reports issued to consumers increased to 168,829. Of the total credit reports issued, 78.9% (133,216) were issued without charge, and the remaining 21.1% (35,613) were issued with charge. There were 25,005 disputes lodged on information held on consumer credit records for the quarter ended March 2014, an increase of 27.2% quarter-on-quarter and 48.2% year-on-year.

Comparisons in this release - ‘quarter-on-quarter’ refers to a comparison between the December 2013 and March 2014 quarters, and ‘year-on-year’ refers to a comparison between the March 2013 and March 2014 quarters.

(Source - NCR Press Release)
 

 

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