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South-east Africa sees rise in housing loans

Johnsburg - Despite the bad business environment in South Africa, the number of home mortgage borrowers has increased, according to the latest loan review. NCR published the Consumer credit Market Reports (CCMR) and the credits bureau monitor (CBM) on the basis of information provided to Regulatory by accredited lenders and bureaux.

Recent coverage covers loan information until June and shows that the overall value of newly extended loans has risen by 8.25 per cent over the previous R121 period. 65 billion and the number of loan requests rose by 5. 79 per cent quarter-on-quarter from 10. Among the key end-June quarterly trend figures was that the value of newly extended mortgage loans rose by R4.78 billion (13.50 per cent) quarter-on-quarter and R3.34 billion (9.07 per cent) year-on-year, with collateralised loans driven by car financing rising by R61.

Further tendencies were that quarterly comparisons of loan facility growth was 90 billion euros (11.35 per cent) and year-on-year comparisons 30 billion euros (21.56 per cent), while quarterly comparisons of uncollateralised loans rose 77 billion euros (11.95 per cent) and year-on-year comparisons 94 billion euros (29.58 per cent). Motshegare Nomsa, NCR CEO, said that those who are struggling with their debts should not be desperate and should be discouraged not to shun their lenders but to turn to them to help with payments transfers or for advice.

Mr Motshegare said the public sector credit counseling procedure was implemented to help those overindebted. "They can no longer cover their debts and cost of life with their incomes. Having a borrower accountant will help the customer with budgetary consulting and rescheduling on the customer's behalf," she said.

Said Ian Wason, CEO of Intelligent Debt Management (IDM), "South Africa's homes have less spending to make and, as more are trying to borrow to get through, the rise in the cost of life and the tight domestic economies are adversely affecting the affordable nature of their debts. "We have seen an increasing tendency among consumer groups who already have an avarage of seven loan contracts (more than 50 percent of which are unfunded debt) and are looking for a consolidating approach so they can release liquidity to keep pace with rising cost of living," Wason said.

It added that, as the recent South American Reserve Bank survey confirms, the 14 per cent rise in value-added tax to 15 per cent, coupled with increases in petrol prices, has added to the pressures on South Africa's budgets, which have already turned more to loans to keep pace. Said Neil Roets, CEO of the rescue, that shoppers who together have more than R1.7 trillion in debts owed in arrears have come to the end of their rope and that the recent rise in gas prices is the stalk that will crush the camel's back.

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