Credit growth sinks further
Mbongeni Mguni | Wednesday July 15, 2026 10:42
The negative credit growth technically means that in May, borrowers were paying back more than they were taking up new loans.
The May position is down from a negative 1.5 percent in April and 0.02 percent in March.
General credit growth, or the rate of output of loans on an annual basis, continues to at historically low levels, reaching one percent in April.
In March, credit growth was measured at 0.87 percent from 2.6 percent in February, 2.5 percent in January and 3.3 percent in December 2025. The low levels are associated with a prolonged liquidity crunch in the banking sector, which has required some players to temporarily pause lending activities and focus on balance sheet stability.
In its May report released this week, the Financial Stability Council said annual growth in commercial bank credit has trended downwards since October 2025, consistent with the subdued economic landscape where firms and households face tighter financing conditions as banks take prudent measures to maintain credit quality amid heightened economic uncertainty.
The lower uptake of credit was attributable to a lower uptake of overdraft and revolving credit facilities by businesses, notably parastatals, as well as minimal acquisition of mortgage and motor vehicle loans by households.