Reports from Consumer Credit Agencies such as TransUnion South Africahas revealed that Consumer Demand for credit remains high.

Outstanding balances are increasing to the previous year comparisons, regardless of the credit categories.  Borrowing Levels are likely driven by the current challenging economic conditions to assist with the day-to-day expenses, there are however still larger purchases being made across most South Africans.

As the Household income growth appears to be weak it has been put increased strain on household finances during this volatile economic conditions.  This aligns with increased delinquencies over the past year.

The first Quarter of 2019 has shown a 310 basis point (bps) increase in delinquency rate for bank personal loans over the past year to 24.8%

The concerns are growing as the continued growth of delinquencies are for secured products, such as Mortgages and Motor Vehicle Finance(s)

The recent study published by TransUnion South Africa, they look into the ranking of the products consumers are likely to stop paying, in the event of economic distress. This study found that South African Consumers are more likely to pay their credit cards, rather than other unsecured products, including (but not limited to) non-bank personal loans and retail accounts.

With the Current Wage growth still not being inline with the current inflation, household incomes continue to fall. The Second Quarter showed that delinquencies were still on the rise across most categories except for Credit Cards.

The Increased use of Credit Cards could possibly be to finance the day-to-day living expenses, this would require the prioritization of payments of credit cards.

Time will tell where the South African economy is heading, however based on the latest GDP figures further concern is growing.  Transunion warned many prompt lenders may have to adjust their credit portfolio strategies.

With Unemployment Growing daily, the concern remains to grow.