• Voter paralysis

    With so much tilting voters against change, democratic reason is the loser, says Solly Moeng.

  • The power of perseverance

    True grit is a reliable predictor of who will achieve success in life, says Ian Mann.

  • It's the system

    The system sucks and it’s being used far too often as an excuse, says Mandi Smallhorne.

All data is delayed
See More

August credit growth slows

Sep 28 2012 08:34

Johannesburg - Growth in credit demand by South Africa's private sector slowed to 7.93% year-on-year in August compared with an 8.34% rise in July, central bank data showed on Friday.

Growth in the broadly defined M3 measure of money supply also braked to 7.78% year-on-year after rising by 8.26% in July.

Economists surveyed by Reuters forecast year-on-year private sector credit growth of 7.95% in August while M3 was seen expanding by 7.65%.

Citadel economist Salomi Odendaal said: “There’s still very slow growth in the mortgage demand, the housing market or sections of it is still struggling. The growth in credit to households is picking up slowly ... but it’s not near the boom times that we’ve seen before so I think there are still pretty cautious in borrowing and there are indications that quite a number of households are having trouble in servicing debt especially the middle to lower income sectors.

“Growth in credit to businesses seems to have come down a little bit recently and it’s mainly a lack of confidence in strong demand.

“Overall credit growth in South Africa is picking up slowly but it’s still in line with the current interest rate policy of the Reserve Bank,” Odendaal said.

The rand was weaker at R8.2495 against the dollar at 06:40 GMT from R8.2260 before the data was released at 06:00 GMT. The yield on the 2015 bond edged up to 5.355% from 5.35% but that for the 14-year bond dipped to 7.365% from 7.38%.

Credit demand growth has been in positive territory since May 2010, although its recovery has been somewhat constrained by high unemployment and an uncertain outlook for companies.

The ratio of household debt to disposable income remains extremely high at more than 76% while unemployment remains around 25%.

The Reserve Bank’s benchmark repo rate is at a four decade low of 5% but despite this, heavily indebted households are somewhat reluctant to borrow more.

*Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

credit growth  |  sa economy


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Debt is one of the biggest financial issues facing South Africans today. Find out how you can avoid and manage your debt with Fin24 and Debt Rescue.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Would you take out a payday loan?

Previous results · Suggest a vote