Consumer Credit Market Report – Q2 2013

Total new credit granted to South African consumers increased from R102.29 billion to R109.62 billion in the second quarter of 2013, representing a quarter-on-quarter increase of 7.2%. At the same time, the number of applications for new credit increased from 10.12 million to 10.35 million, a quarter-on-quarter increase of 2.3%. Of these new applications, 56.14% were rejected, up from 50.84% a year ago.

As expected, banks were the primary providers of credit in the second quarter, granting R87.73 billion or just over 80% of all new credit. “Other credit providers”, which includes pension backed lenders, developmental lenders, micro-lenders, agricultural lenders and insurers, amongst others, granted R11.61 billion (10.59%). Non-bank vehicle financiers and retailers granted R6.4 billion (5.84%) and R3.87 billion (3.53%) respectively (see Figure 1).

Measured as at June 2013, total outstanding gross debtors book credit stood at R1.45 trillion, 45% of South Africa’s gross domestic product, while the number of open accounts stood at 40.84 million.

Credit distribution per capita in South Africa for Q2 2013

Gauteng consumers were granted the most credit per capita in the second quarter of 2013, receiving on average R4257.61 per person, higher than the national average of R2101.85 per person. Consumers in the Western Cape were granted the second highest amount of credit per capita, receiving on average R2587.03 per person (see Figure 2).

At the opposite end of the credit spectrum, Limpopo consumers received a relatively conservative R761.51 per person on average, driven by lower income levels as well as a lack of access to credit.

Anthony Spyron

Economist, Quantec

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