CAPE TOWN: The total amount South African consumers owed creditors rose 1.4% to R1.6-trillion in the first quarter, data from the National Credit Regulator (NCR) showed on Thursday.
The mortgages debtors book increased R7.3bn, the secured credit debtors book rose by R5.8bn, while the unsecured credit debtors book fell by R2.3bn. The decline in unsecured lending will be welcome news after warnings of a credit bubble.
Unsecured credit posted strong growth in SA until creditors tightened lending criteria in recent years. However, Prof Carel van Aardt at the University of SA’s Bureau of Market Research said on Thursday that consumers who relied heavily on unsecured credit had found other ways of accessing loans.
“Many consumers, particularly the heavily indebted, have moved on to short-term credit and informal forms of credit to finance consumption.”NCR data showed that the rate at which creditors rejected credit applications fell in line with a decline in the number of consumers who applied for credit.
NCR acting manager for statistics Ngoako Mabeba said this was not unusual in the first quarter of the year. “The 11.4% drop in rejected applications is largely informed by the 10% drop in the number of consumers who applied for credit. There was basically less to reject,” he said.
The number of credit applications received fell from 11.53-million in the fourth quarter to 10.39-million in the first quarter of this year.
