Banks to loosen credit lending criteria on vehicle loans - 11 Aug 2009 09:17
The growing effect that the recession is having on the South African economy is leading to financiers relaxing their credit lending criteria in the hopes of increasing activity in the automotive markets.
Wesbankâs vehicle sales confidence index for July showed improvement in business confidence among 250 car dealers surveyed. Up to 4.3 from 4.2 out of 10 in May, the confidence expects the retail growth to continue into 2010.
Yet, still, the biggest factor impeding growth in the automotive market is credit lending. Customers either battle to get loans or fail to fulfill them. The type of credit offered by Wesbank, according to Chris de Kock, Executive Head of Sales and Marketing, is a different realm of credit than before the National Credit Act. Confidence in the industry is also spurred b the fact that other banks, too are deciding to loosen their credit criteria.
This has led to more people committing themselves to long term debt. The new credit lending though, according to de Kock, is done in a prudent manner in line with the National Credit Act which was inaugurated to promote responsible lending.
With third party insurance compulsory on all financed vehicles, an increase in sales will take some of the pressure off of insurance providers.
The growing effect that the recession is having on the South African economy is leading to financiers relaxing their credit lending criteria in the hopes of increasing activity in the automotive markets.
Wesbankâs vehicle sales confidence index for July showed improvement in business confidence among 250 car dealers surveyed. Up to 4.3 from 4.2 out of 10 in May, the confidence expects the retail growth to continue into 2010.
Yet, still, the biggest factor impeding growth in the automotive market is credit lending. Customers either battle to get loans or fail to fulfill them. The type of credit offered by Wesbank, according to Chris de Kock, Executive Head of Sales and Marketing, is a different realm of credit than before the National Credit Act. Confidence in the industry is also spurred b the fact that other banks, too are deciding to loosen their credit criteria.
This has led to more people committing themselves to long term debt. The new credit lending though, according to de Kock, is done in a prudent manner in line with the National Credit Act which was inaugurated to promote responsible lending.
With third party insurance compulsory on all financed vehicles, an increase in sales will take some of the pressure off of insurance providers.