While the number of loan applications has stayed the same, new consumer credit is down by 10 percent.
According to the National Credit Regulator (NCR), the value of new consumer credit granted in the first quarter declined more than 10 percent from the previous three months, to R121,6 billion. Meanwhile, the number of applications for loans remained mostly changed at 10,48 million.
The NCR data revealed that total outstanding consumer credit balances increased 1.3 percent from the previous quarter, taking the gross debtors’ book to R1,78 trillion at the end of March, while private-sector credit growth slowed to 4,6 percent in May. According to recent data from the Reserve Bank, this is the slowest pace since September 2010.
During the first quarter of this year, South Africa’s economy shrank the most in nine years, contracting by 2,2 percent compared with the prior three months, as output at mines, factories and farms declined.