DEBT TRAPS
Fewer seek credit as tough times bite
Consumers, many of whom are vulnerable in an environment of rising retrenchments and weak economic growth, are trying to pay down debt
Consumers adopted a cautious stance to credit applications in the first quarter of 2017, figures from the National Credit Regulator show. At end-March, credit applications decreased by 998,000 to 9.53-million, representing a quarter-on-quarter decline of 9.5%, the regulator said. Consumers, many of whom are vulnerable in an environment of rising retrenchments and weak economic growth, are trying to pay down debt. Head of Absa home loans Carel Grönum said last week household debt to disposable income, at 73%, was at its lowest level since the global financial crisis. Credit bureau Compuscan recorded a 13% year-on-year increase in the number of accounts that were more than three months in arrears in the first quarter, suggesting consumers cannot afford to take on more debt. The total value of new credit granted in the first quarter fell 5.6% from the fourth quarter of 2016 to R116.5bn, representing a 7.5% year-on-year increase, the regulator said. The largest increase was recorded in ...
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