Unsecured credit in SA soars to R4.77 billion – report

The National Credit Regulator (NCR) has revealed that unsecured credit in South Africa has increased by R4.95 billion (21.87%) quarter-on-quarter and by R4.77 billion (20.89%) year-on-year.

The NCR released its Consumer Credit Market Report (CCMR) and the Credit Bureau Monitor (CBM) on Wednesday which paints a grim picture of the credit climate in South Africa.

The reports are based on data submitted by the registered credit providers and credit bureaus.

The latest edition of the reports covers credit market information from September 2021 to December 2021.

The report reveals that the total value of new credit granted increased by 5.90% quarter-on-quarter from R159.12 billion to R168.51 billion while the number of credit agreements entered into increased by 20.92% quarter-on-quarter from 3.45 million to 4.18 million.

Some of the most significant trends observed in terms of credit granted for the quarter ended December 2021 include:

• The value of new mortgages granted decreased by R3.42 billion (5.17%) quarter-on-quarter and increased by R73.33 million (0.12%) year-on-year.

• Secured credit which is dominated by vehicle finance, increased by R5.20 billion (11.45%) quarter-on-quarter, and by R3.13 billion (6.60%) year-on-year.

• Credit facilities increased by R2.49 billion (11.71%) quarter-on-quarter and by R6.02 billion (33.94%) year-on year.

The total outstanding consumer credit balances (or gross debtors book) as at December 2021 was R2.11 trillion, representing an increase of 1.58% quarter-on-quarter and of 5.06% year-on-year.

The report also revealed that credit bureaus held records for 26.39 million credit-active consumers, which showed a decrease of 0.16% when compared to the 26.42 million in the previous quarter.

“Consumers classified in good standing increased by 248,058 to 16.50 million consumers. This amounts to 62.55% of the total number of credit-active consumers. The number of credit-active accounts decreased from 85.07 million to 83.62 million in the quarter ended December 2021.”

The number of impaired accounts has decreased from 20.16 million (23.70%) to 19.54 million (23.37%) in December 2021, a decrease of 615,498 quarter-on-quarter and 4,280,914 year-on-year.

The NCR has urged consumers to do a budget on a monthly basis and manage it.

“For those consumers battling with their debt repayments, they should not despair; they are rather encouraged to contact their credit providers for assistance with payment re-arrangements. Avoiding credit providers when in distress is not a solution. In worst cases, the assistance of a registered debt counsellor must be sought.”

The NCR said debt counselling was introduced to assist consumers who are over-indebted when their monthly income is not sufficient to cover all financial obligations and living expenses.

A registered debt counsellor will assist the consumer with budget advice and debt restructuring, said Advocate Obed Tongoane, DCEO at the NCR.

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