Is credit extension in SA out of control?

Unsecured credit explosion? Sure. Concerns about abuses and sustainability in this sector? Absolutely.

But is overall domestic credit extension out of control? Are real interest rates negative? Is the global economy strong and steaming ahead?

The answer to all these questions is “no”. Here is a graph produced from public reservebank data.

Credit extension is recovering after a precipitous decline after 2007, but is still below long run averages
Total credit extension is hardly out of control.

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

Leave a comment

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.