NCR consumer credit market report roundup

According to the Consumer Credit Market Report (CCMR) and the Credit Bureau Monitor (CBM), released by the National Credit Regulator (NCR), there was an increase in the value of new credit granted.

There was an increase in the amount of outstanding consumer credit balances (gross debtor’s book).
 
This report looks at the quarter ended December 2014.
 
Justmoney looks at the results of the CBM and the CCMR and what this means for consumers.
 
Consumers’ credit standings
 
At the end of December 2014, there were 22.84 million credit-active consumers, according to the CBM. This is an increase over the number of credit-active consumers for the same period in 2013 (20.64 million).
 
The number of consumers in good standing with regards to their credit also increased, going from 10.71 million in 2013, to 12.58 million in December 2014.
 
Adding to the good news, the percentage of consumers with impaired records decreased to 44.9% from 48.1%.
 
According to the CBM, the credit standing of consumers is as follows:

• 42.6% of consumers are up-to-date on their credit repayments;
• 12.5% are one to two months in arrears;
• 23.8% are three or more months in arrears;
• 10.4% of consumers have adverse listings against them; and
• 10.7% of consumers have judgments and administrative orders against them.

 
New credit
 
Nomsa Motshegare, CEO of the NCR, pointed out that there has been a 6.77% quarter-on-quarter (from September 2014 to December 2014) in the total value of new credit granted from R110.18 billion for the quarter ended September 2014 to R117.64 billion for the quarter ended December 2014.
 
However, despite this quarter-on-quarter increase, there was still a decrease in the value of new credit granted from 2013 of 0.86% on a year on year basis.
 
There was also an increase in the number of applications for credit.
 
“The number of applications received for credit increased by 1.887 million from 9.64 million in September 2014 to 11.53 million in December 2014, a quarter-on-quarter increase of 19.58%,” stated a press release from the NCR.
 
While the number of applications for credit increased, the number of applications rejected remained unchanged at 6.166 million, approximately 53.49% of all applications.
 
The types of credit that were granted during the period ended December 2014 include:

• Mortgages,
• Secured credit,
• Unsecured credit,
• Short-term credit, and
• Developmental credit.

The value of new mortgages granted increased by 4.5% from December 2013 to December 2014 to R1.56 billion. While secured credit, such as vehicle finance, increased by 2.54% (R1.03 billion) for the same period.
 
Unsecured credit, however, decreased by 13.48% (R2.91 billion) year-on-year for the period ended December 2014.
 
Gross debtor’s book
 
The NCR pointed out that there was year-on-year growth of 4.51% for “the total outstanding consumer credit balances,” raising the figure to R1.59 trillion for the period ended December 2014.
 
The mortgages debtor’s book and the secured debtor’s book both saw increased on a year-on-year basis, increasing by 2.83% (R23.18 billion) and 7.63% (R24.64 billion) respectively. However, the unsecured credit debtor’s book decreased for this period by R1.78 billion (1.04%).
 
This means that while there is more money owing on mortgages and secured loans, the amount of money that is owed to creditors for unsecured loans has decreased.
 
Consumer credit reports
 
According to the CBM, enquiries for consumer records increased 24.1% year-on-year to 432.71 million.
 
The reasons for these enquiries include:

• Consumers seeking credit,
• Enquiries related to telecommunications services,
• For tracing or debt collection purposes, as well as,
• For account management and contact information updates.

During this period, the number of credit reports that were issued to consumers decreased by 0.5% to 145.923 million. The CBM states that 69.3% (101.119 million) of these “were issued without charge”, while the remaining 30.7% (44.804 million) “were issued with charge.”
 
With regards to disputes lodged against the “the accuracy of the information recorded on consumer credit records”, these increase by 16.1% year-on-year to 22.822 million.
 
Motshegare stated: “A significant proportion of consumers did not heed the call to spend wisely and prioritise reducing or settling their debts during the festive period. Consumers must learn to live within their financial means and borrow responsibly.

"Those experiencing financial distress must make arrangements with their credit providers or seek assistance from any debt counsellors before running into arrears.”