Credit extension drying up for some

Easy and relatively cheap loans from banks appear to be drying up for households and businesses as the economic outlook in South Africa continues to deteriorate according to Standard Bank.

However, if you have used any of the micro-finance companies such as African Bank, then they are willing to throw money at potential borrowers who need to inject some cash into their accounts.

Business Live quotes Leila Fourie, head of the credit card division at Standard Bank as saying that confidence among consumers is weak and as a result, the bank expects household credit extension to slow down from 4,4% in 2011 to about 3,4% in 2012.

She says that demand for credit was unexpectedly strong in the first quarter at 5,2% but contracted sharply in the second quarter to 3,8%.
Meanwhile, African Bank is now offering customers loans of up to R180 000 that can be repaid at a rate of R4 766 a month over 84 months. It also offers short-term loans of up to R5 000 that can be repaid over six or nine months.

So it seems while traditional banks are making credit that much more difficult, the smaller niche banks are making in-roads by making credit easy to obtain.

Read the full article on www.businesslive.co.za.