It look likes the demand on credit is not exactly over. However, there seems to be a change in shape - less mortgage finance, more vehicle and business finance.

The growth in South Africa's private sector credit extension data for September was the highest rate of growth in about 17 years and is cause for concern as it has implications for inflationary pressures, according to economic analysts RLJP.

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The researchers add that the month-on-month growth in leasing finance remained unchanged at 2.0 percent from August, showing that consumers were continuing to buy cars on credit.

RLJP say that month-on-month growth in mortgage advances declined for the second successive month, although at 2.0 percent growth, it is still "very high".

They add that month-on-month growth in the "other loans and advances" section, however, shot up by some 4.2 percent, or around 16.6 billion rand higher than in August.

"This section is a proxy for borrowings by business to fund import and export flows, and the jump in borrowing reflects the fact that exporters might have been squeezed during September. Normally, exporters would borrow when the rand is strong, repatriating foreign exchange when the rand weakens.

However, the rand weakened through September, suggesting that exporters' had low levels of operating cash and they were forced to borrow," say the analysts.
full story from Business Report here