“Demand is outstripping supply. Absolutely. You are definitely seeing it in the unsecured lending space, from personal loans to credit cards to overdrafts,” he told Business Day TV.
This is happening across the banking industry, with FirstRand’s peers also seeing strong demand for credit cards, personal loans, and overdrafts.
However, this increased demand is not met by more supply from banks as consumers cannot afford more debt, and banks are unwilling to take on riskier customers.
“Demand is very high for these facilities, but approval rates are very low. Maybe around two in ten people are being approved for these products,” Pullinger said.
He explained that people are simply failing to pass the affordability test for new credit facilities and cannot take on the burden of additional debt in the current environment.
