Unsecured lending surges to R381bn

Pretoria - Unsecured loans in South Africa surged by 21% to R381bn in the year to June, the Reserve Bank said on Wednesday, as banks continue to plough into the profitable and potentially risky market.

The SA Reserve Bank also warned in its semi-annual review of the financial system that planned global liquidity regulations in their current form could hurt the economy.

South African banks have ramped up unsecured loans - high-interest loans including credit cards and overdrafts that aren’t backed by collateral - to offset weak corporate demand for credit.

Some analysts have warned there may be a bubble forming.