The fifth month in a row of overall credit growth shows a healthy improvement in corporate lending
31 December 2021 - 12:53
by Karl Gernetzky
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Demand for private sector credit accelerated at its fastest pace in nine months in November, with corporate loans picking up significantly.
Private sector credit extension rose 2.46% year on year in November, up from 1.29% in October, and marking a fifth consecutive month of growth.
The consensus forecast, according to macroeconomics website Trading Economics, was for 1.5% growth.
Month on month, credit demand rose 1.6% in November, the highest observed since March 2020, said Nedbank Group Economic Unit economists Liandra da Silva and Nicky Weimar in a note.
Corporate loans recorded the highest annual growth rate observed since April 2020, accelerating from 0.7% in October to 3.2% in November. “This is a positive development given that the uncertain economic environment has weighed on corporate credit demand for over a year,” the economists said.
Covid-19 has prompted many companies to prioritise debt reduction and put off expansion plans, given the high levels of uncertainty generated by the pandemic.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Credit demand accelerates in November
The fifth month in a row of overall credit growth shows a healthy improvement in corporate lending
Demand for private sector credit accelerated at its fastest pace in nine months in November, with corporate loans picking up significantly.
Private sector credit extension rose 2.46% year on year in November, up from 1.29% in October, and marking a fifth consecutive month of growth.
The consensus forecast, according to macroeconomics website Trading Economics, was for 1.5% growth.
Month on month, credit demand rose 1.6% in November, the highest observed since March 2020, said Nedbank Group Economic Unit economists Liandra da Silva and Nicky Weimar in a note.
Corporate loans recorded the highest annual growth rate observed since April 2020, accelerating from 0.7% in October to 3.2% in November. “This is a positive development given that the uncertain economic environment has weighed on corporate credit demand for over a year,” the economists said.
Covid-19 has prompted many companies to prioritise debt reduction and put off expansion plans, given the high levels of uncertainty generated by the pandemic.
gernetzkyk@businesslive.co.za
Fitch hikes SA’s outlook from negative to stable
Urgent reforms needed to put SA on lasting growth path, IMF warns
SA credit demand unexpectedly softens in October
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
EDITORIAL: Falling credit extension to private sector could be a blessing in ...
MAMOKETE LIJANE: Time to buckle up for an uncomfortable rate hiking journey
FirstRand sees profit rising by almost one-third as impairments trend lower
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.