The South African consumer credit landscape maintained its resilience during the last quarter of 2023 with a significant 11% overall growth in originations – a measure of new accounts opened – across all products.

This is according to credit reporting agency, TransUnion, who stated in its

Q4 2023 South Africa Industry Insights Report

, that delinquencies improved significantly across most products, apart from home loans.

The most significant year-over-year (YoY) growth in originations was in non-retail credit products: personal loan (across banking and non-banking sectors) originations increased by 13.4%, home loan originations increased by 17.5% YoY, and credit card originations increased by 4.3% YoY.

Account-level delinquencies across all three retail credit products improved, with retail revolving loans down by 220 bps and retail instalment loans down by 190bps.

For home loans, TransUnion observed the following:

According to TransUnion, the deterioration in home loan delinquencies could be attributed to payment shock – a sudden change in monthly payment obligations caused by external factors – caused by a rising interest rate environment and high inflation, which in turn has led to a higher cost of living and debt.

This is supported by the

Q4 2023 South Africa Consumer Pulse Report

, in which nearly half (47%) of consumers said that they had to cut down on discretionary spending, such as dining out, travel and entertainment, due to inflation and other factors. They also planned to spend less on retail shopping and big purchases.

“Many South African homeowners initially faced payment shocks when interest rates escalated during 2022 and 2023, but the subsequent increase in the cost of living due to higher-than-expected inflation has put them under even more pressure,” said Lee Naik, CEO of TransUnion Africa.