There has been a 29% decrease in the number of vehicle and asset finance (VAF) accounts between the value of R400 001 and R999 999 recorded in the first quarter of 2016, compared with the last quarter of 2015, reports credit bureau Compuscan.

Compuscan says this trend suggests that credit providers might have been reluctant to grant VAF loans of medium to high value at the beginning of the year. This was likely due to concerns about consumers not being able to afford this debt.

Similarly, there was a 20% decrease in the number of VAF loans to the value of R1-million and more, and a 13% decrease in VAF loans between the value of R250 001 and R400 000.

These changes, most likely, also point to the fact that consumers – even those in higher income brackets – have also been affected by increases in the cost of living.
 
Interestingly, there was a 156% increase in VAF loans to the value of R50 000 or less.

There was also a 16% increase in VAF loans between the value of R51 000 to R100 000, and a 10% increase in those between R101 000 and R250 000.

This reiterates the possibility that those who might ordinarily qualify for loans over R250 000, were not able to do so, settling for a loan of a lower value.

Compuscan also notes there was a 32% decrease in the number of fixed-term (short-term) loans classified as current as at the end of the first quarter 2016, while there was an 11% increase in the number of fixed-term (short-term) loans that were more than three months in arrears.

In addition, there was a 19% increase in VAF accounts that were  more than three months in arrears.

“There were, no doubt, a number of factors at play in influencing consumers’ ability to obtain loans of various kinds,” comments Compuscan senior data analyst Jacobus Eksteen.

“These could include stricter lending criteria implemented by credit providers due to new regulations and concerns over consumer risk.”
 
According to Compuscan, the number of credit-active consumers in South Africa remained reasonably steady, with a 2% increase from the fourth quarter, 2015, to the first quarter, 2016, to 27.5-million consumers with accounts, judgments or notices listed on the bureau.

Among these consumers, there were 70.7-million accounts recorded at Compuscan at the end of the first quarter of the year. Of these, only 48.6-million were classified as paid up to date.

This reflects a 10% decrease, quarter-on-quarter, in the number of up-to-date accounts listed on the bureau.

As it stood at the end of the first quarter of this year, there were about 146 000 consumers who had been declared over-indebted, and who were subject to a debt-counselling process.

There were also 2.8-million consumers that were more than three months in arrears with account payments (listed as the worst status on their reports).