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Capitec's lending criteria now stricter than during Covid-19 amid risk deluge

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Capitec CEO Gerrie Fourie.
Capitec CEO Gerrie Fourie.
Gallo Images / Sunday Times / Alaister Russell

South Africa's biggest digital banker Capitec says clear signs of pressure on its client base and a litany of global risks has prompted stricter lending criteria than during the heights of Covid-19, but it is still pleased with its recent growth and is continuing a push to attract wealthier clients.

Stickier-than-expected inflationary pressures, aggressive moves from major global central banks, the ongoing war in Ukraine, as well as load shedding are among the factors resulting in a more conservative approach to credit, CEO Gerrie Fourie said on Thursday. Despite high levels of uncertainty, the bank is still seeing very strong demand for credit, and grew its loans over a third in its 2023 half year. It has also been cutting back lending to lower-income clients, generally the most affected by high inflation and rising interest rates.

Capitec said the proportion of its active clients that are cash stressed, or who have less than 20% of their cash left after obligations, had increased from about 11% before Covid-19, 12% last year in August, to 13% currently.

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