Credit Bureau Stats Show Millions Of People Are In Trouble

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Credit Bureau Report Shows More Consumers In Trouble

Every few months the National Credit Regulator (NCR) share a report of statistics shared by the credit bureaus (there are over 13 bureaus in SA).

The long and short of it is that, more consumers are in trouble than at the start of the year (big surprise) but not as many as you may think, given the state of the economy. This relates to provisions the banks made to assist consumers (such as payment holidays) and the way reporting is done.

The Amount of Credit Users

There are currently around 14 Million employed South Africans. Interestingly, the amount of people using credit or who have credit accounts is 27 Million people (or double the number who have a job).

These 26.96 Million people have multiple accounts; 85.23 Million accounts to be accurate.

People In Trouble

If you start to miss payments on your accounts for a couple of months (3 months) then the credit bureaus record you as having an impaired account. It is little surprise that the number of impaired accounts has gone up. A quarter of all credit accounts are behind on payments by several months.

‘At present, around 17 Million credit users have simply not been able to pay for a number of months’

It is also no surprise that the number of people who are struggling to pay their credit on time has gone up. What is surprising is that the number has not yet sky rocketed to the extent many people expected. While the number is still high, numbering over half a million people, this figure is likely to be even higher when the next report is released as pressure form the lockdown and income reductions is felt.

559 318 more people than before missed  payments once lockdown began

At present, around 17 Million credit users have simply not been able to pay for a number of months. It is expected that this number will continue to grow in the next report as an additional 2.2 Million people are reported to have lost their jobs during the first 3 months of the lockdown.

Banks Taking Strain

The report also shows that the banks have not been able to give people as much new credit (on top of the credit they already have). New credit granting plunged during these months in some cases to about a third of what they expected.

Banks need to give out credit to make a profit (just like they need at least some people to pay back the credit they have to cover their costs). When they have fewer new clients and new accounts it is not good for their bottom line.

Download the Report Here

Consumer Credit Market Report 2020Q2