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Consumer appetite for credit increases

Johannesburg - The value of new credit granted increased by 11% in the quarter ended December 2010, compared to the previous quarter, the National Credit Regulator (NCR) said on Monday.

"The total value of new credit granted increased from R75.14bn for the quarter ended September 2010 to R83.53bn for the quarter ended December 2010, an increase of 11.17% when compared to the previous quarter, but 31.97% higher than a year ago," said Nomsa Motshegare, acting CEO of the NCR.

This emerged from the NCR's Consumer Credit Market Report, covering December 2009 to December 2010 and based on data submitted by registered credit providers.

The report found that the value of new mortgages granted in the last quarter of 2010 increased by 2% quarter-on-quarter (q/q) from R26.34bn to R26.87bn.

Secured credit, which is mainly vehicle finance, increased by 11.6% q/q to R28.12bn.

Over the same period, unsecured credit increased from R13.38bn for September 2010 to R16.83bn for December 2010 - a q/q increase of 25.77%.

Credit facilities - mainly consisting of credit cards, store cards and bank overdrafts - increased by 16.25% q/q from R8.81bn to R10.25bn.

The report shows that people who earn a gross monthly income of more than R15 000 a month received on average 82% of the number of mortgages granted from December 2009 to December 2010.

The NCR said as at December 2010, the total outstanding consumer credit balances was R1.19 trillion, representing a q/q growth of 1.84%.

Of this, mortgages accounted for 64%, secured credit for 17%, credit facilities were 11%, unsecured credit made up 6% and short-term credit 0.06%.

The banks' share of the total outstanding consumer credit as at December 2010 was R1.07 trillion - or 90%.

Retailers accounted for R36.80bn, non-bank vehicle financiers for R39.35bn and "other credit providers" for R42.03bn.
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