: SA consumer credit increases amid global economic crisis

Wednesday, March 25, 2009

Johannesburg - South Africa's consumer credit has increased amid the global economic crisis, according to the National Credit Regulator (NCR).

Releasing the consumer credit records report, the Credit Bureau Monitor, the NCR said nearly half of credit-active South Africans had "impaired records" in December 2008.

According to the data, of the total of 17.56 million credit-active consumers as at the end of the December 2008 quarter, 58.4 percent were in good standing while 41.6 percent had "impaired records".

"Of the total 17.56 million credit-active consumers, the percentage of customers in good standing reflected a quarter-on-quarter decrease of 1.1 percent and a year-on-year decrease of 4 percent to 58.4 percent at the end of the December 2008 quarter.

"The percentage of consumers with an impaired record (the inverse of those in good standing) had a quarter-on quarter increase of 1.1 percent (200 000 increase in number) and a year-on-year increase of 4 percent (850 000) to 41.6 percent," the NCR reported.

In the fourth quarter of 2008, 115.05 million enquiries were made on consumer records, which was a 7.7 percent decrease from the previous quarter but an increase of 13.3 percent since the quarter ending December 2007, the NCR stated.

According to the Credit Bureau monitor report, enquiries from banks accounted for 34 percent and enquiries from retailers accounted for 26 percent of all the enquiries made during the quarter.

It further stated that the enquiries by banks decreased by 3.9 percent in comparison with the previous quarter and while enquiries by retailers decreased by 27.2 percent, mainly due to the September quarter having been inflated by enquiries for marketing purposes.

The NRC said consumers lodged 9 020 disputes which were related to the accuracy of the credit information on their credit records. The credit bureau also received 412 06 disputes for the full year of 2008.

The report also showed that disputes had decreased by 8.6 percent compared with the previous quarter of 2008 and by 36 percent over the last year.

In the fourth quarter of 2008, 33 827 free credit reports were issued to consumers and 152 222 free credit reports were issued for the full year of 2008.

However, the value of credit agreements entered into in the quarter to June 2008 declined 4.6 percent to R76.9 billion from R80.7 billion in the March quarter. The NCR said R42.7 billion or 55.5 percent of the amount was for property mortgages.

Total outstanding retail credit balances stood at R1.1 trillion in June 2008.