Nomsa Motshegare, Acting CEO of the National Credit Regulator (NCR), said that NCR statistics indicate a 25.95% increase in consumer credit granted when compared to June 2010. The NCR drew its attention to the continued increase in unsecured lending which has seen a year-on-year growth of 61.27%. The Regulator also noted that the proportion of new mortgages granted has rapidly declined from 51.91% in December 2007 to 29.91% in June 2011.
The National Credit Regulator released its ‘Consumer Credit Market Report’, which is based on data submitted to it by registered credit providers. This edition covers credit market information from June 2010 up to June 2011.
The total value of new credit granted increased from R80.75 billion for the quarter ended March 2011 to R85.08 billion for the quarter ended June 2011, an increase of 5.36% when compared to the previous quarter, but 25.95% higher than a year ago.
The number of applications received for credit increased by 834,700 from 5.80 million in March 2011 to 6.63 million in June 2011 an increase of 14.39% (also an increase of 1.43% when compared to the same period last year). The following were some of the most significant trends observed for the quarter ended June 2011:
· The value of new mortgages granted increased by 2.78% quarter-on-quarter from R24.76 billion to R25.45 billion;
· Secured credit, which is dominated by vehicle finance, showed a decrease from R27.45 billion for March 2011 to R26.96 billion for June 2011 (a quarter-on-quarter decrease of 1.77%);
· Unsecured credit increased from R16.69 billion for March 2011 to R18.95 billion for June 2011 (a quarter-on-quarter increase of 13.54%);
· Credit facilities which mainly consists of credit cards, store cards and bank overdrafts increased by 15.65% quarter-on-quarter from R10.43 billion to R12.06 billion;
· Short term credit showed a quarter-on-quarter increase of 16.21% from R1.42 billion to R1.65 billion;
· Individuals with a gross monthly income of more than R15,000 received on average 83% of the number of mortgages granted over the period June 2010 to June 2011.
As at June 2011, the total outstanding consumer credit balances (or gross debtors’ book) was R1.23 trillion representing a quarter on quarter growth of 1.32%. The breakdown was as follows: mortgages accounted for R773.37 billion (63.04%); secured credit was R228.97 billion (18.66%); credit facilities were R135.75 billion (11.07%); unsecured credit was R87.98 billion (7.17%) and short-term credit was R747.10 million (0.06%).
The banks’ share of the total outstanding consumer credit as at June 2011 was R1.10 trillion (89.88%) with the retailers at R37.76 billion (3.08%), non-bank vehicle financiers at R40.87 billion (3.33%) and “other credit providers” at R45.51 billion (3.71%). Other credit providers consist primarily of pension-backed lenders, insurers, non-bank mortgage lenders and securitized debt.