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<\/a><\/figure><\/div>\n\n\nOn a product level, Home Loans saw the largest deterioration in CDI, with a 21% drop from 2.22 to 2.68 year-on-year. <\/p>\n\n\n\n
Although still significant, the rate of deterioration is slowing down. In Q4 2023, the annual deterioration rate was 60%. <\/p>\n\n\n\n
As home loans account for the majority share of the total market exposure, the deterioration in Home Loans was the main driver of the overall drop in the composite CDI. <\/p>\n\n\n\n
Credit cards<\/strong> were the other primary (albeit less significant) driver of the composite CDI’s drop, moving down 5% from 7.28 to 7.63. <\/p>\n\n\n\n This suggests that mid-to-high affluence consumers<\/strong>, who usually qualify for these high-end credit products, are struggling to repay debt<\/strong> and are becoming more dependent on their credit cards to cover monthly expenses. <\/p>\n\n\n Even if Consumer Price Inflation (CPI) is now within the South African Reserve Bank\u2019s target range of 3%\u20146%, the cost of living crisis is continuing to put pressure on consumers. <\/p>\n\n\n\n “The rapid rate at which interest rates have increased and have now been at a sustained high level for the last 12 months has put immense strain on credit-active consumers, particularly those exposed to secured credit,” said Van Jaarsveldt.<\/p>\n\n\n\n The report also shows a strong market appetite for consumer credit, with application levels reaching record highs in Q4 2023. <\/p>\n\n\n\n As approval levels remain low at 32.2%, roughly two-thirds of applications are rejected, mainly because consumers cannot afford additional credit commitments. <\/p>\n\n\n<\/a><\/figure><\/div>\n\n<\/a><\/figure><\/div>\n\n\n