NCR: SA consumers drowning in debt

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With many consumers drowning in debt, the National Credit Regulator (NCR) has called on consumers to monitor their budgets closely over the festive period.

The CEO of the NCR, Nomsa Motshegare, said credit bureau statistics for the quarter ended September showed that consumers were drowning further in debt.

Motshegare on 4 December 2013, encouraged consumers to save enough for the coming year, further warning consumers against the reckless spending of their hard-earned bonuses.

Credit bureaus held records for 20.29 million credit-active consumers, an increase of 0.4% when compared to the 20.21 million in the previous quarter.

Consumers classified in good standing increased by 9 000 to 10.53 million consumers.

As a percentage of the total number of credit-active consumers at 51.9%, this reflects a decrease of 0.1% quarter-on-quarter and 1.1% year on year.

The number of consumers with impaired records increased by 71 000 to 9.76 million from 9.69 million in the previous quarter. As a percentage of the total number of credit-active consumers at 48.1%, this reflects an increase of 0.1% quarter-on-quarter and 1.1% year-on-year.

According to the NCR, the number of accounts decreased from 71.20 million in the previous quarter to 71.17 million. The number of impaired accounts increased from 18.87 million to 19.25 million, when compared to the previous quarter, an increase of 375 000 quarter-on-quarter and 1.99 million year-on-year.

A total of 357.65 million enquiries were made on consumer credit records, a decrease of 0.7% quarter-on-quarter and an increase of 11.5% year-on-year. Enquiries initiated by consumers accounted for 16.16 million of all enquiries, an increase of 1.6% quarter-on-quarter and 1.5% year on year.

Of the total enquiries made on consumer records, enquiries from banks and other financial institutions accounted for 85.1%, while enquiries from retailers accounted for 3.2% and enquiries from telecommunication providers accounted for 4.6%.

Banks and other financial institutions’ enquiries decreased by 0.2% from the previous quarter, retailers decreased by 43.3% and telecommunication providers increased by 12.1%.

The number of credit reports issued to consumers increased to 164 437.

The regulator, which is an agency of the Department of Trade and Industry, was established as the regulator under the National Credit Act 34 of 2005 and is responsible for the regulation of the South African credit industry. It is tasked with carrying out education, research, policy development, registration of industry participants, investigation of complaints, and ensuring enforcement of the Act.

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