TransUnion Q2 2020 Industry Insights Report (IIR)

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

Get the summary
Carmen Williams

“The latest report encompasses the first full quarter where COVID-19 related lockdowns and social distancing measures were in effect. Consumers and lenders have had to adapt to very challenging conditions and we are starting to see the emergence of a number of important trends. The use of payment holidays has contributed to a general increase in outstanding balances. At the same time, demand for new credit declined significantly.”

- Carmen Williams, Director of Research and Consulting

IIR Q2 2020 Results

Consumer Credit Balances and Delinquencies Rise as COVID-19 Continues to Shift Market Dynamics

  • Payment holidays contributed to a rise in outstanding credit balances
  • New credit enquiries, often a function of consumer confidence, fell significantly
  • Delinquencies increased as household finances came under increased pressure due to rising unemployment and income shocks

TransUnion findings of the Q2 2020 South Africa Industry Insights Report chronicle the impact of COVID-19 on the consumer credit market. With a fall in GDP* and associated rise in unemployment, consumers are having to prioritise their personal finances to cope with the dramatic effects of the pandemic.

The latest report shows that in Q2 2020, total outstanding balances grew year-on-year (YoY) as consumers looked to secure payment holidays to help manage household budgets. At the same time, stretched consumer finances led to a rise in delinquencies, especially for non-bank personal loans and home loans.

Q2 2020 Metrics for Major Consumer Credit Products

Product YoY % Change in Enquiries YoY % Change in Originations(1) YoY % Change in Total Outstanding Balance Serious Delinquency Rate (2) YoY Basis Points (bps) Change in Delinquency Rate
Credit card 62% 12.2% 2.0% 12.8% +50
Bank personal loans -47% -3.3% 8.6% 22.2% +70
Non-bank personal loans -39% 7.0% 12.9% 32.1% +440
Home loans 11% 8.1% 11.6% 7.8% +410
Vehicle finance -26% -4.8% 4.9% 7.4% +190
(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).

Infographic

Unpack the most important facts, findings and insights held in this quarter’s infographic. Download our latest version here.

Download Infographic

Press Release

Consumer Credit Balances and Delinquencies Rise as COVID-19 Continues to Shift Market Dynamics

Read our latest Press Release here

Want to learn more?

Get the summary