South Africa’s banks have slowed growth in unsecured lending since a November warning, according to the central bank.
Such loans, which aren’t backed by assets, increased by about 25 percent annually in March, down from 30 percent in November, Hendrik Nel, in charge of the financial stability unit at the central bank, said at an event in Johannesburg today. The bank’s supervision department met with the nation’s lenders last year, Rene van Wyk, registrar of banks, said.
“There’s been a dramatic slowdown in unsecured lending,” Van Wyk said. “We’re satisfied that our intervention worked.”
African Bank Investments Ltd., the nation’s largest provider of unsecured loans, cut its dividend 71 percent on May 20 as net income decreased 26 percent. South African consumers are struggling to repay debt with a 25 percent unemployment rate, increasing fuel and electricity costs and an economy that will grow 2.4 percent this year, the slowest since the 2009 recession according to central bank estimates.