Microlenders 'no threat to credit cards'

Johannesburg - The Standard Bank Group [JSE:SBK], South Africa's biggest credit card issuer, said on Thursday microlenders such as African Bank Limited [JSE:ABL] or Capitec Bank Holdings [JSE:CPI] will not challenge its dominance in the credit market.
 
"While we are sensitive that there is competition out there, we don't see microlenders as the most serious competition," said Standard Bank card division director Leila Fourie.
 
As the likes of Capitec are trying to attract higher-earning clients, it may pose a threat to the traditional credit card operations of the big four banking groups.

Fourie said South Africans have rediscovered their appetite for swiping credit cards as interest rate cuts started to take effect.
 
"Historically, we have seen a 12- to 18-month lag in spend and balance growth on credit cards after interest rates began to reduce," she said.
 
The number of new credit cards opened in the last 12 months has risen by 30% year-on-year (y/y).
 
Purchases of electronics goods and furniture are up 19% and 17% respectively y/y, while spending on sporting goods is up 29%.
 
Fourie said she remained "cautiously optimistic" about demand for credit in the second half of 2010, but warned that unemployment, an inefficient debt review system and a volatile oil price could potentially weigh on demand in coming months.
 
 - Fin24.com