Quarter Four 2024 Credit Stress Report Showcases Key Consumer Credit and Economic Trends

The Quarter Four 2024 Credit Stress Report provides in-depth insights into South Africa’s evolving credit landscape, highlighting key shifts in consumer borrowing, repayment behaviour, and economic trends. This quarter saw a decline in loans in arrears, a rise in credit-active consumers, and notable changes driven by factors such as the repo rate cut, fuel price relief, and the impact of festive season spending. Understanding these patterns is essential for lenders, businesses, and financial institutions looking to make informed decisions and manage risk effectively.

Notable developments in quarter 4 were:

Loans in arrears declined

• The number of loans in arrears dropped by 343,257, bringing the total to 17.6 million.
• The percentage of loans in arrears decreased from 35.5% in Q3 to 34.7% in Q4.
• Loans in good standing increased by 467,211, reflecting a 1.4% QoQ improvement.

Fuel price and economic relief

• Petrol prices fell by 6.9% QoQ to R21.27 per litre.
• Diesel prices declined by 7.1% QoQ, reaching R18.77 per litre.
• This was driven by a 7.3% QoQ drop in global oil prices.

Increase in credit-active consumers

• The credit-active population grew by 0.88% YoY.
• Total overdue balances rose by 3% QoQ, following 0.8% growth in Q3.
• The proportion of credit-active individuals with loans in default dropped to 42%, continuing a downward trend from 2023 Q3.

Repo rate and inflation

• Inflation eased to 2.9% YoY in Q4, the lowest since June 2020.
• The repo rate was cut by 25 basis points in November, reducing it to 7.75%.
• This led to the prime rate declining from 11.50% to 11.25%, offering slight financial relief.

Read the full quarter four 2024 credit stress report here.