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TransUnion index shows stable South African consumer credit health in fourth quarter

TransUnion’s South African consumer credit index recently revealed that consumer credit health remained stable during the fourth quarter.

The index, a measure of consumer credit health in which the neutral level is 50, rose to 49.9 from 49.2 in the third quarter, indicating that risks to South African consumer health have balanced out, Yahoo reports.

“Overall credit market distress does not appear imminent, but nor does credit health seem to be improving,” Geoff Miller, CEO of TransUnion, said, according to Yahoo.

The index conflicts with growing evidence that a rapid increase in the amount of unsecure lending has pushed South African consumers to borrow beyond their means.

Approximately half of South Africa’s 19.5 million credit-active consumers have tarnished credit histories with a number of financial service providers. A survey released earlier this month revealed that South Africans were less vulnerable financially during the third quarter than they have been in the past three years, Yahoo reports.

TransUnion’s index measures accounts as opposed to people, who are likely to have more than one account. The index also omits accounts that are less or more than three months in arrears.

Additionally, TransUnion said that the number of credit impairments to overall credit fell below the levels of 2.2 percent seen during the recent financial crisis.

“At present, the evidence suggests some respite in loan delinquencies,” the company said, according to Yahoo. “If this trend continues, it may help push the overall TransUnion consumer credit index above 50 in the next quarter.”