Photo: The Times

CONSUMER credit health was relatively stable in the fourth quarter of this year, reflecting steady loan impairment rates and a moderation in the growth of revolving credit facilities, according to an index released on Tuesday.

The TransUnion SA consumer credit index rose to 49.9 from a revised 49.2 in the third quarter, indicating that the risks to South African consumer credit health are fairly balanced.

The index is a measure of consumer credit health where the neutral, breakeven level is 50.

"Overall credit market distress does not appear imminent, but nor does credit health seem to be improving," TransUnion CEO Geoff Miller said.

The index is at odds with mounting evidence that an explosion in the pace of unsecured lending has pushed consumers beyond their financial limits.

Data from the National Credit Regulator show nearly half of SA’s 19.5-million credit-active consumers have impaired records with a range of financial service providers.

A survey released last week also showed the financial vulnerability of consumers slid to its lowest level in three years during the third quarter of this year.

But the TransUnion index shows the number of credit accounts three months in arrears rose by just 3% compared with the fourth quarter of last year.

At current levels, impaired consumer credit accounts amounted to between 1.7% and 1.8% of the total, its research showed.

The apparent discrepancy with the regulator’s data could stem from the fact that the TransUnion index measures accounts rather than people, who are likely to have several accounts.

It also does not include accounts that are either less or more than three months in arrears.

TransUnion said the ratio of impairments to overall credit was well below the levels of 2.2% seen during the recession in 2009.

"At present, the evidence suggests some respite in loan delinquencies. If this trend continues it may help push the overall TransUnion consumer credit index above 50 in the next quarter," TransUnion said in a statement.

The index is compiled by TransUnion Credit Bureau, a global credit and information manager, with technical assistance from ETM Analytics.