Steady increase in mortgage credit extension

Johannesburg - The National Credit Regulator has released the Consumer Credit Market Report, which is based on the data submitted by registered credit providers.

This latest edition of the report covers credit market information up to September 2013.

Nomsa Motshegare, CEO of the NCR, said that the statistics reported for the quarter ended September 2013 indicated a moderate increase in the value of new credit granted.

She encouraged consumers to live within their means and to use credit responsibly.

Credit decreased

The total value of new credit granted increased by nearly 7% from R109.62bn for the quarter ended June 2013 to R117.21bn for the quarter ended September 2013.

There was an overall quarter-on-quarter growth for all credit types with the exception of "unsecured" credit and short-term credit.

Mortgages and "secured credit" had the largest quarter-on-quarter growth of R4.42bn and R2.37bn.

The number of applications received for credit decreased by 127 000 from 10.35m in June 2013 to 10.22m in September 2013, a decrease of 1.23% quarter-on-quarter and a decrease of 1.52% year-on-year.

The following were some of the most significant trends observed in terms of credit granted for the quarter ended September 2013:

* The value of new mortgages granted increased by 14.69% quarter-on-quarter from R30.10bn to R34.52bn.

* Secured credit, which is dominated by vehicle finance, increased from R37.54bn for June 2013 to R39.91bn for September 2013, a quarter-on-quarter increase of 6.32%.

* Credit facilities, consisting mainly of credit cards, store cards and bank overdrafts, had an increase of 6.57% quarter-on-quarter from R16.63bn to R17.72bn.

* Unsecured credit decreased from R22.06bn for June 2013 to R20.90bn for September 2013, a quarter-on-quarter decrease of 5.29%.

* Short-term credit decreased from R1.45bn for the quarter ended June 2013 to R1.39bn for the quarter ended September 2013, a decrease of 3.84%.

* Developmental credit had a quarter-on-quarter increase of 50.90% from R1.83bn to R2.77bn.

As at September 2013, the total outstanding consumer credit balances (or gross debtors' book) was R1.49trn, representing a quarter-on-quarter growth of 1.80% and a year-on-year growth of 7.37%.

The trends for outstanding balances for the quarter ended September 2013 were as follows:

* Mortgages debtor's book increased from R799.41bn for the quarter ended June 2013 to R809.89bn for the quarter ended September 2013, an increase of 1.31%.

* Secured debtor's book, which is dominated by vehicle finance, increased from R300.93bn for June 2013 to R311.67bn for September 2013, a quarter-on-quarter increase of 3.47%.

* Credit facilities debtor's book, which consists mainly of credit cards, store cards and bank overdrafts, had a quarter-on-quarter increase of 2.27% from R175.90bn to R179.90bn.

* Unsecured credit debtor's book decreased marginally from R168.06bn for June 2013 to R167.41bn for September 2013, a quarter-on-quarter decrease of 0.39%.

* Short-term credit debtor's book decreased from R870.71m for the quarter ended June 2013 to R817.41m for the quarter ended September 2013, a decrease of 6.12%.

* Developmental credit debtor's book increased from R21.71bn for the quarter ended June 2013 to R23.96bn for the quarter ended September 2013, an increase of 10.37%.

The banks' share of the total outstanding consumer credit as at September 2013 was R1.27trn (85.35%), followed by the retailers at R37.71bn (2.53%), non-bank vehicle financiers at R53.50bn (3.58%), and "other credit providers" at R127.52bn (8.54%). Other credit providers consist primarily of pension-backed lenders, insurers, non-bank mortgage lenders and securitised debt.