Dec 17

Written by: PIC Solutions News Editor
Thursday, December 17, 2009 

THE PERCENTAGE of consumers in good credit standing had continued to decrease, the National Credit Regulator (NCR) said yesterday.

This followed its monitoring of registered credit bureaus and the quality of their data.

As at the end of June, credit bureaus had records for 17.79 million credit-active consumers, the NCR said.

According to these records the percentage of consumers in good standing stood at 55.9 percent, a decrease of 1.7 percentage points when compared with the quarter to March and 4.5 percentage points lower than the quarter to June last year.

The NCR said the number of consumers with impaired records continued to increase to 7.85 million in the June quarter.

"This implies a deterioration in credit records for 390 000 consumers in comparison with the first quarter and 1.06 million year on year, reflecting a further increase in the level of debt stress," the NCR said.

The trend of consumers with impaired records has been increasing since June 2007.

According to the NCR 121.46 million enquiries were made on consumer credit records in the quarter to June.

This was an increase of 23.4 percent quarter on quarter.
Of the total enquiries made on consumer records, those by banks and other financial institutions accounted for 39.4 percent, retailers for 14.2 percent and telecommunications providers for 23.7 percent.

The NCR said credit reports issued to consumers increased in the quarter, with 33 662 free credit reports being issued, an increase of 9.8 percent quarter on quarter. A further 5 288 credit reports had been issued with charge.

In the quarter to June, 7 072 disputes were lodged in relation to the information on consumer credit records. This represented a quarter-on-quarter decrease of 15.5 percent and a year-on-year decrease of 26.8 percent, it said.

Meanwhile, credit risk solutions company PIC Solutions said yesterday that consumers were showing renewed appetite for credit. "And consumer credit organisations are preparing for the economic turnaround," director Simon Trupp said.

Standard Bank's announcement at the beginning of September that it was introducing an increased risk acceptance rate in its home loans and credit divisions would have a "significant impact" on the consumer credit industry.

Other banks were following with a similar easing up of lending policies.

Author: Business Report, 08 Oct 2009 Page 5