Consumer credit activity in 2016 revealed
The National Credit Regulator released the ‘Consumer Credit Market Report’ (CCMR) and the Credit Bureau Monitor (CBM) in early July. The report covers information on the consumer credit market for the first quarter of 2016 (January to March) and is based on data provided to the NCR by registered credit providers and credit bureaus. The reports are a very useful look into the credit needs of consumers, and how providers are meeting these needs.
Overall, the market saw a decrease in the total number of credit applications by 11.72% compared to the previous quarter (from 11.32 million to 9.99 million). The total value of new credit granted also decreased from the previous quarter by 12.74% – R124.15 billion to R108.33 billion.
The Consumer Credit Market Report revealed the followed findings from the secured and unsecured lending markets.
The total value of secured credit granted decreased from R7.61 billion from last quarter, a decrease of 18.22%. However, the secured debtor’s book increased by R933.10 million, a 0.25% change. The secured credit market is still dominated by vehicle finance.
The total value of unsecured credit granted also decreased from last quarter by R3.59 billion (15.87%). It did, however, increase year on year by R1.48 billion, a change of 8.49%. The secured debtor’s book increased by 0.29% (R477.81 million).
Overall credit facilities also decreased by 15.97% from last quarter (R658.76 million), but their debtor’s book increased by R3.16 billion, a 1.65% change from last quarter.
Definition: a debtor’s book is the total amount owed to credit facilities by consumers (debtors)
The CBM revealed that credit bureaus held records for 23.88 million active credit consumers for the first quarter of 2016. This is a 0.59% increase on the previous quarter. The report also stated that the number of consumers with ‘good’ credit increased by 460,000 to 14.33 million, and counted for 58.44% of the total number of active credit consumers.
This is positive reading as it demonstrates consumers are being successfully active in reducing their debt and meeting monthly payments. The number of consumers with poor or impaired credit reduced by 320,000 to 9.55 million for the quarter, which also supports the theory the consumers are improving the control of their finances, at least in the early part of 2016.
Finally, in the first quarter of 2016, there were 391.78 million inquiries made on consumer credit records. The number of inquiries made directly by consumers accounted for 16.99 million, a quarterly increase of 8.63%. The total number of credit reports issued to consumers was 129,458, with 93,997 of these being issued without charge.
It is important to remember to always look for a lender or credit bureaus license number before engaging with them. All lenders and credit agencies must be licensed by the National Credit Regulator and all licensed member will display their NCR license number on their website. You can also search the NCR license database here.