TransUnion Q3 2020 Industry Insights Report (IIR)

TransUnion South Africa’s Industry Insights Report containing the latest consumer credit trends

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IIR Q3 2020 Results

Demand for Consumer Credit Falls as South Africans Remain Cautious

  • Consumer demand for credit fell, influenced by both consumer sentiment and ability to access finance
  • Lenders continued to adjust their risk appetite and took a cautious approach to funding new credit
  • Delinquencies continued to rise but were less pronounced for credit cards which have a greater perceived utility in COVID-19 times

TransUnion’s Q3 2020 South Africa Industry Insights Report shows the ongoing impact of COVID-19 on the consumer credit market and the difficult decisions some consumers have to make to balance their household finances.

Although the latest data primarily relates to a period when COVID-19 measures were less stringent than during the initial lockdowns seen earlier in the year, there was still a fall in consumer demand. Application volumes (as measured by enquiries) declined as consumer confidence remained low, with a reduced appetite for new credit reflecting increased unemployment and high levels of financial hardship.

Carmen Williams

“With the prolonged nature of the pandemic, it’s clear that the economic impact has been significant and sustained. Consumer confidence and lender risk appetites have been severely impacted, and the latest results show the changing dynamics of both the demand and supply of credit.”

- Carmen Williams, director of research and consulting for TransUnion South Africa

Q3 2020 Metrics for Major Consumer Credit Products

Product YoY % Change in Enquiries YoY % Change in Originations (1) YoY % Change in Total Outstanding Balances Serious Delinquency Rate (2) YoY Basis Points (bps) Change in Delinquency Rate
Credit card -49% -23.1% -1.9% 12.2% +40
Bank personal loans -18% -60.9% 8.7% 22.4% +50
Non-bank personal loans -29% -51.1% 1.0% 32.8% +620
Home loans -15% -62.4% 2.6% 7.8% +350
Vehicle finance -22% -53.7% 10.9% 7.2% +160
Clothing -23% -69.4% -7.4% 34.3% +630
(1) Originations are viewed one quarter in arrears to account for reporting lag
(2) Account-level serious delinquency rate, measured as percentage of accounts three or more payments past due

About the TransUnion IIR Report

TransUnion’s South Africa Industry Insights Report is an in-depth, full population-based solution that provides statistical information every quarter from TransUnion’s national consumer credit database, aggregated across virtually every active credit file on record. Each file contains hundreds of credit variables that illustrate consumer credit usage and performance. By leveraging the Industry Insights Report, institutions across a variety of industries can analyse market dynamics over an entire business cycle, helping to understand consumer behaviour over time.

Businesses can access more details about and subscribe to the Industry Insights Report. The South Africa Industry Insights Report looks at major consumer lending categories: credit cards, personal loans, home loans, vehicle and asset finance (VAF), and clothing. The report primarily focuses on three dimensions across these categories: originations (new accounts opened), balances (outstanding total and average lending balances) and delinquencies (accounts in payment arears).

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Press Release

Demand for Consumer Credit Falls as South Africans Remain Cautious.

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