Nedbank projects improved credit demand by the end of 2024, citing factors like lower inflation, easing interest rates, and access to retirement funds through the two-pot system as drivers that will reduce strain on household finances. In August 2024, overall growth in loans and advances rose from 3.8% to 4.8%, with corporate credit leading the way at 6.4% growth, driven by a rebound in company loans and subcategories such as general loans and commercial mortgages. However, household credit remained weak, with growth slowing from 3.2% to 3.1%, reflecting the continued impact of high interest rates, weak consumer confidence, and tighter lending standards.

Subcategories showed mixed performance: home loan growth held steady at 2.5%, while personal loans declined for the fifth consecutive month, down by 1.1%. Credit card usage remained robust, growing by 9.8%, though slightly lower than July’s 10.6%. Despite this, early signs indicate that consumers are beginning to manage debt better, with the Experian Consumer Default Index (CDI) for Q2 2024 showing improvements in credit default behaviour for home loans, vehicle loans, and credit cards.

While household credit demand is expected to recover in the coming months, Nedbank remains cautious about corporate credit, predicting volatility for the remainder of the year, with fixed investment growth not anticipated until 2025. The bank expects overall credit growth to reach just under 5% by year-end, accelerating to 6% in 2025.