Absa witnesses sustained growth recording R12.6bln personal loans book

02 November 2011 Absa

Absa, South Africa’s leading bank, says that despite volatile economic conditions, its personal loan book has grown 12.4% year-on-year to R12.6 billion.

“In 2010, our total loan portfolio totalled R11.2 billion and benefited approximately 600 000 borrowers. Currently, we are experiencing a growing trend of borrowers who are particularly tapping into low value loans. Our improved performance can largely be attributed to this,” says Tshiwela Mhlantla, Managing Executive of Absa Personal Loans.

She expects Absa’s personal lending to grow faster than the industry average which is approximately 15% per annum. “The bank has strong growth plans over the next few years, particularly in the entry level market,” adds Mhlantla.

“By enhancing access to entry level customers, we can channel capital into under-served communities while adhering to responsible lending practices in the best interests of our customers and the bank,” states Mhlantla.

She notes that members of the public, who are in need of emergency loans, sometimes resort to approaching unscrupulous lenders who may not even be registered according to the National Credit Act.

“This is largely because these customers have been excluded from mainstream banking. However, it must be emphasised that loans should only be considered if customers have a need and if borrowers are confident that they are able to honour their repayment obligations.”

The growth experienced in the bank’s personal lending to the entry level market could be attributed to Absa’s innovation with regard to access and delivery platforms for this market segment.

A year ago, the bank piloted Absa Express Loan, a short term loan facility, in Absa Loan Centres and Entry Level and Inclusive Banking (ELIB) branches. This product was launched in Retail Branches this year due to the growing demand for short term loans.

Recently, the bank also enabled the application of short and medium term personal loan products via Cellphones. If the application is successful, the money is received in the customer’s account in less than 10 minutes.

"We are justifiably proud of how much Absa Personal Loans has accomplished and of the contribution we have made in propping up various individuals and businesses - in accordance with responsible lending practices," emphasises Mhlantla.

"As we continue to grow our book and expand our range of products and services, we maintain a single-minded commitment to delivering innovative lending solutions that will continue to provide our customers with greater access, convenience security and value.

“I believe that these considerations – coupled with our attractive terms and customer service – have contributed to our year-on-year growth – a trend that I feel is sustainable owing to us being a leading and responsible financial services provider,” concludes Mhlantla.

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