Consumer credit recovers

National Credit Regulator (NCR) statistics indicate a "significant" recovery in consumer credit.

This followed the release on Thursday of the NCR's fifth Consumer Credit Report, based on data submitted to it by registered credit providers.

The fifth edition covers credit market information from December 2008 up to December 2009.

In a statement, NCR CEO Gabriel Davel said the total value of new credit granted increased from R53.58 billion in the quarter ended September 2009 to R63.30 billion for the quarter ended December 2009.

This was an increase of 18.13 percent compared to the previous quarter, though still a decline of 3.75 percent compared to the previous year.

"This indicates that after a two year period of ongoing decline in the volume of credit granted, credit volumes may be recovering," Davel said.

He said the number of consumers applying for credit increased by 11.03 percent when compared to the quarter ended September 2009.

The number of consumers whose applications for credit had been declined, remained at 44 percent.

Significant trends included the finding that the value of new mortgages granted increased by 18.33 percent from R17.82 billion in September 2009 to R21.08 billion in December 2009.

Secured credit - dominated by vehicle finance - showed an increase from R20.17 billion in September 2009 to R23.67 billion in December 2009 - a quarter-on-quarter increase of 17.32 percent.

Unsecured credit increased from R8.37 billion in September 2009 to R10.54 billion in December 2009 -- a quarter-on-quarter increase of 25.83 percent.

The report found that individuals who earn gross monthly income of more than R15,000 per month received on average 80 percent of the mortgages granted over the period December 2008 to December 2009.

The NCR pointed out that although this was the most significant increase in credit granted for two years, the gross value of credit granted for the quarter was still significantly lower than the amount granted prior to the period of contraction.

In the December 2009 quarter, R63.3 billion of credit was extended compared to R102.3 billion for the December 2007 quarter, the NCR said.

The position for mortgages was similar, with R21.08 billion in mortgages granted in the December 2009 quarter compared to R53.14 billion in the quarter to December 2007.

Unsecured credit had grown most significantly, with a growth of 25.8 percent over the last quarter and an increase of 32.7 percent since the December 2007 quarter.

As at December 2009, the total outstanding consumer credit balances was R1.13 trillion.