Continued recovery in consumer credit

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 2009 up to June 2010.

The total value of new credit granted increased from R61.55 billion for the quarter ended March 2010 to R67.55 billion for the quarter ended June 2010 , an increase of 9.75% when compared to the previous quarter, but 33.32% higher than a year ago.

Increase in credit applications

As at June 2010, the total outstanding consumer credit balances (or gross debtors' book) was R1.15 trillion representing a quarter on quarter growth of 0.90%. The breakdown was as follows: Mortgages accounted for R749.03 billion (64.85%); "Secured credit agreements" was R215.02 billion (18.62%); Credit facilities were R129.11 billion (11.18%); Unsecured credit was R61.14 billion (5.29%); and Short-term credit was R682.10 million (0.06%).

The number of applications received for credit increased by 503 500 from 6.04 million in March 2010 to 6.54 million in June 2010 representing an increase of 8.34% (an increase of 17.13% when compared to the same period last year). The number of applications for credit that were rejected amounted to 40.26%.

The following were some of the most significant trends observed for the quarter ended June 2010:

• The value of new mortgages granted increased by 13.48% quarter-on-quarter from R20.81 billion to R23.61 billion;
  
• Secured credit which is dominated by vehicle finance, showed an increase from R22.34 billion for March 2010 to R23.02 billion for June 2010 (a quarter-on-quarter increase of 3.06%);
  
• Unsecured credit increased from R10.00 billion for March 2010 to
  R11.75 billion for June 2010 (a quarter-on-quarter increase of 17.49 %);
  
• Short-term credit showed a quarter-on-quarter increase of 6.45% from R1.27 billion to R1.35 billion;
  
• Individuals who earn gross monthly income of more than R15 000 per month received on average 80% of the number of mortgages granted over the period June 2009 to June 2010.

The banks' share of the total outstanding consumer credit as at June 2010 was R1,03 trillion (89.45%) with the retailers at R38,47 billion (3.33%), non-bank vehicle financiers at R37,71 billion (3.27%) and "Other credit providers" at R45,71 billion (3.96%). Other credit providers consist primarily of pension-backed lenders, insurers, non-bank mortgage lenders and securitized debt.

Consumer Credit Market Report