Growth in outstanding credit balances in the South African household sector dropped to 1,4% year-on-year at the end of July 2016, which was the lowest year-on-year growth on record in the past 15 years. This low growth is inter alia the result of data distortions related to developments regarding unsecured credit balances. Growth in household mortgage balances was fairly stable since April, with growth of 4,2% year-on-year up to the end of July.
The household sector is expected to face continued financial strain in the rest of the year and into 2017, mainly driven by a poorly performing economy, inflationary pressures and expected higher interest rates in coming months. These developments will further dampen levels of confidence, which will contribute to continued subdued growth in household credit extension.
Read more here: Credit and mortgage advances (Jul 2016)