The consumer credit market worth R1,1 trillion

The report thus reflects consumer credit, as well as agreements with juristic persons with a turn-over or net assets of less than R1 million. It excludes all other juristic persons. It includes credit provided by banks as well as by any other registered credit provider but excludes credit providers which are not required to register (eg. where the entity has fewer than 100 agreements or less than R500,000 in outstanding credit).

Decline in credit approval

The total value of new credit agreements entered into declined from R80,71 billion to R76,98 billion for the quarters ended March 2008 to June 2008. This represents a drop of 4.6% in credit extension for these two reporting quarters. There were 2,187 million new applications for credit as at June 2008 compared to 2,177 million as at March 2008.

Of the R76,98 billion credit granted during the June 2008 quarter, R42,70 billion or 55.5% was for mortgages. New mortgages granted declined by 4.3% from R44,62 billion to R42,70 billion between the March and June 2008 quarters. The next biggest credit category is “Other credit agreements” which includes vehicle finance for which disbursements decreased from R28,14 billion to R25,78 billion for the quarters March 2008 to June 2008.

Outstanding

As at June 2008, the total outstanding balances on consumer credit was R1,1 trillion. Of this, mortgages account for 63.2% or R706,46 billion and “Other credit agreements” (including vehicle finance) stood at R231,15 billion as at June 2008.

For the quarter ended June 2008 the banks share of the Consumer Credit Industry is 87.4% or R975,83 billion. The banks grew their loan books by 3.2% for the quarter ended June 2008. The balance of the Consumer Credit Industry is held by furniture and clothing retailers, Specialist motor vehicle financiers, homeloans financiers and microlenders.

Out of the R76,98 billion credit granted, Gauteng Province received 51.47% or R39,55 billion followed by Western Cape with 15.2% or R11,71 billion.

Download the full Consumer Credit Report (.pdf) here.