Total defaulters are down 2% and total overdue balances are down 11% from quarter four 2021. This is largely driven by significant write-offs of olds loans (particularly VAF) over the last year. Overall, there was strong demand for new credit with 800 000 new entrants to the credit market in quarter four, compared to 600 000 in the previous year. These new entrants took out R9.3bn in new loan value, the highest in more than 2 years, and up nearly 10% on last year. There has also been a significant surge in credit card balances with total loan balances up R25bn (12%) YoY. This brings the total credit active population to 18.7m with total loans balances of R2.3 trillion.
Despite this healthy growth, it is the Rate of New Defaults (RND), the proportion of current loan balances that went into default during the quarter, that is particularly worrying – sitting at 2.2%, up by nearly 16% compared with this time last year. This sharp increase in the RND year-on-year is driven primarily by credit card, home loans and VAF loans with increases of 20%, 19% and 18% respectively (compared to -0.3%, 10% and 5% in quarter three). The RND is an early warning indicator of the state of credit stress amongst South African consumers.
|