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National Credit Regulator: Credit extension slows down Print E-mail
Thursday, 25 June 2015

The National Credit Regulator (NCR) today released the ‘Consumer Credit Market Report’ (CCMR) and the Credit Bureau Monitor (CBM), which are based on the data submitted to the NCR by registered credit providers and credit bureaus respectively. This latest edition of the reports covers credit market information up to March 2015. Nomsa Motshegare, CEO of the NCR, states that the total value of new credit granted decreased from R117.64 billion for the quarter ended December 2014 to R107.54 billion for the quarter ended March 2015, this was quarter-on-quarter decrease of 8.59%. This slowdown in credit extension was observed for all credit types.

Motshegare advised consumers to continue to exercise the necessary caution, live within their financial means and borrow responsibly. Those experiencing financial distress must make arrangements with their credit providers or seek assistance from any registered debt counsellor. The number of applications received for credit decreased by 1,137,000 from 11.53 million in December 2014 to 10.39 million in March 2015, a quarter-on-quarter decrease of 9.87%.

The following were some of the most significant trends observed in terms of credit granted for the quarter ended March 2015:

·       The value of new mortgages granted decreased by R4.54 billion (12.52%) quarter-on-quarter but increased by R900.63 million (2.92%) year-on-year.
·        Secured credit, which is dominated by vehicle finance, decreased by R4.13 billion (9.93%) quarter-on-quarter but increased by R2.13 billion (6.01%) year-on-year.
·        Unsecured credit decreased by R1.30 billion (6.96%) quarter-on-quarter and decreased by R1.42 billion (7.55%) year-on year.
·        Developmental credit increased by R475.44 million (52.93%) quarter-on-quarter but decreased by R1.77 billion (56.29%) year-on year. The spike in Developmental credit in the first quarter is driven largely by study loans and the trend is generally expected.

The total outstanding consumer credit balances (or gross debtor’s book) as at March 2015 was R1.61 trillion, representing an increase of 1.39% quarter-on-quarter and 3.85% year-on-year increase. The trends for outstanding balances for the quarter ended March 2015 were as follows:

·        Mortgages debtor’s book increased by R7.31 billion (0.87%) for the quarter ended March 2015, and R25.23 billion (3.06%) on a year-on-year basis.
·        Secured credit debtor’s book increased by R5.80 billion (1.67%) for the quarter ended March 2015. On a year-on-year basis the book grew by R21.83 billion (6.58%).
·        Unsecured credit debtor’s book decreased by R2.34 billion (1.38%) for the quarter ended March 2015. On a year-on-year basis the book decreased by R6.33 billion (3.66%).
·        Developmental credit debtor’s book increased by R7.33 billion (29.14%) for the quarter ended March 2015. On a year-on-year basis the book increased by R798.42 million (2.52%).

Credit bureaus held records for 23.11 million credit-active consumers, an increase of 1.2% when compared to the 22.84 million in the previous quarter. Consumers classified in good standing increased by 118,000, to 12.70 million consumers. As a percentage of the total number of credit-active consumers at 55.0%, this reflects a decrease of 0.1% quarter-on-quarter and 0.8% year-on-year.

The number of consumers with impaired record has increased by 146,000 from 10.26 million to 10.41 million. As a percentage of the total number of credit-active consumers at 45.0%, this reflects an increase of 0.1% quarter-on-quarter and a decrease of 0.8% year-on-year. The number of accounts decreased from 82.13 million in the previous quarter to 82.04 million for the quarter ended March 2015. The number of impaired accounts increased from 22.28 million to 22.38 million when compared to the previous quarter, an increase of 91,000 quarter-on-quarter and 3.11 million year-on-year.
 
A total of 336.08 million enquiries were made on consumer credit records, a decrease of 22.3% quarter-on-quarter and increase of 0.7% year-on-year. Enquiries initiated by consumers accounted for 12.76 million of all enquiries, a decrease of 19.1% quarter-on-quarter and 10.9% year-on-year. The number of credit reports issued to consumers increased to 149,222. Of the total credit reports issued, 69.5% (103,771) were issued without charge, and the remaining 30.5% (45,451) were issued with charge. There were 22,912 disputes lodged on information held on consumer credit records for the quarter ended March 2015, a decrease of 0.4% quarter-on-quarter and 8.4% year-on-year.
 
Comparisons in this release- ‘quarter-on-quarter’ refers to a comparison between the December 2014 and March 2015 quarters, and ‘year-on-year’ refers to a comparison between the March 2014 and March 2015 quarters.

(Source - NCR Media Release)
 

 

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