{"id":746988,"date":"2024-01-31T13:21:36","date_gmt":"2024-01-31T11:21:36","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=746988"},"modified":"2024-01-31T13:34:56","modified_gmt":"2024-01-31T11:34:56","slug":"south-africans-turning-to-credit-cards-to-get-by-2","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/746988\/south-africans-turning-to-credit-cards-to-get-by-2\/","title":{"rendered":"South Africans turning to credit cards to get by"},"content":{"rendered":"\n<p>South Africa&#8217;s households are cash-strapped, with consumers turning to their credit cards to buy essentials. <\/p>\n\n\n\n<p>In its analysis of the broad money supply (M3) and credit extension, the Nedbank Group Economic Unit said that the weakness in the household market remained due to higher interest rates &#8211; while wider household confidence was eroded by poor economic prospects. <\/p>\n\n\n\n<p>Commercial banks are also scared of extending credit due to the rise in vulnerabilities of household balance sheets and rising defaults.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"Gss9rpTlKY\"><a href=\"https:\/\/businesstech.co.za\/news\/banking\/736933\/absa-joins-the-chorus-of-interest-rate-warnings-for-south-africa\/\">Absa joins the chorus of interest rate warnings for South Africa<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Absa joins the chorus of interest rate warnings for South Africa&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/banking\/736933\/absa-joins-the-chorus-of-interest-rate-warnings-for-south-africa\/embed\/#?secret=BYruWvmyOv#?secret=Gss9rpTlKY\" data-secret=\"Gss9rpTlKY\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Growth in household credit dropped from 4.8% YoY in November 2023 to 4.3% in December &#8211; the lowest level since March 2021. <\/p>\n\n\n\n<p>&#8220;The drag mainly came from home loans and overdrafts, where growth slowed to 3.5% and 1.6%,<br>respectively. Overdrafts contracted sharply by 4.6% after five consecutive months of weak growth,&#8221; Nedbank&#8217;s economists said. <\/p>\n\n\n\n<p>&#8220;Instalment sales &amp; leasing finance remained surprisingly resilient, with the growth rate steady at a robust 7% for the third successive month.&#8221;<\/p>\n\n\n\n<p>Nevertheless, <strong>personal loans (up from 3.5% to 4.2%) and credit card usage (up from 9.1% to 9.3%) increased. <\/strong><\/p>\n\n\n\n<p><strong>Thus, Nedbank said that households resorted to credit to supplement spending on essential goods and services.<\/strong><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/01\/loans-dec-credit-nedbank-sarb-.jpg\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"629\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/01\/loans-dec-credit-nedbank-sarb--1024x629.jpg\" alt=\"\" class=\"wp-image-746990\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/01\/loans-dec-credit-nedbank-sarb--1024x629.jpg 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/01\/loans-dec-credit-nedbank-sarb--300x184.jpg 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/01\/loans-dec-credit-nedbank-sarb--768x471.jpg 768w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2024\/01\/loans-dec-credit-nedbank-sarb-.jpg 1072w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure><\/div>\n\n\n<p class=\"has-medium-font-size\"><strong>Outlook <\/strong><\/p>\n\n\n\n<p>The group expects credit demand to remain subdued in the first half of the new year, with the cumulative impact of the interest rate hikes continuing to impact the economy. <\/p>\n\n\n\n<p>Weak consumer confidence due to poor growth prospects and heightened political uncertainty will also keep consumers wary when borrowing. <\/p>\n\n\n\n<p>&#8220;At the same, commercial banks will remain wary of accelerating credit extension given the strains on household finances,&#8221; Nedbank said. <\/p>\n\n\n\n<p>&#8220;Corporate demand will continue to be supported by renewable energy projects, but the upside will be contained by fading profits and high operational costs, which will convince many companies to trim large capital expenditure plans.&#8221;<\/p>\n\n\n\n<p>&#8220;We expect credit growth to improve gradually during the second half of the year as the interest rates ease and the economy recovers slightly.&#8221;<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read<\/strong>: <a href=\"https:\/\/businesstech.co.za\/news\/finance\/746898\/imf-slashes-south-africas-gdp-growth-forecast-for-2024-2\/\" target=\"_blank\" rel=\"noreferrer noopener\">IMF slashes South Africa\u2019s GDP growth forecast for 2024<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>South African banks remain cautious when extending credit to households amid high interest rates. <\/p>\n","protected":false},"author":95,"featured_media":707940,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[4576,26,1799,3619],"class_list":["post-746988","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-credit-card","tag-headline","tag-nedbank","tag-sarb"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/746988","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=746988"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/746988\/revisions"}],"predecessor-version":[{"id":747284,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/746988\/revisions\/747284"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/707940"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=746988"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=746988"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=746988"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}