40% have bad credit records

Johannesburg - More than half of South African consumers are considered to be in good standing in terms of credit, the National Credit Regulator said on Wednesday.

"Out of 17.17 million consumers, 10.38 million consumers were in good standing, while 6.79 million consumers had impaired records," it said.

The regulator said this emerged from findings for the quarter ended June 2008.

Consumers were considered to be "in good standing" if none of their accounts were more than two months in arrears.

Consumers had impaired records when at least one of their accounts was more than two months in arrears, or if they had judgments or other negative information on their credit records, the NCR said.

This implied that 60.4% of all consumers have good credit records. This was slightly down from 61.6% of consumers that had good records in the March 2008 quarter.

There was therefore a 1.2% increase in the percentage of consumers with impaired records since the last quarter, with a cumulative increase of 3.2% since the June 2007 quarter.

In the quarter to June 2008, 110.24 million enquiries were made against consumer credit records, compared to 108.88 million enquiries for the March 2008 quarter.

About 39.4% of all enquiries for credit bureau reports during the June 2008 quarter were made by banks, 25.7% by retailers and 34.9% by all other categories together.

Enquiries by banks declined by 18% since the last quarter, while enquiries by retailers increased by 14%.

A total of 41 057 credit bureau reports were issued to consumers during the course of this quarter, while more than 120 000 consumers reviewed their reports over the course of the last nine months.

Debt levels were not excessive, but the present global and domestic economic environments suggested that "past interest rate hikes would result in a further deterioration in terms of consumer and business stress before the situation improves", Econometrix said in a comment on the NCR's latest figures.

- Sapa