This was mainly the result of lower unsecured credit balances up to August, while mortgage balances were also down from July, which could be related to rising financial strain experienced by the household sector against the background of inflationary pressures, declining real income growth and higher interest rates.

Household credit balances showed growth of 3,6% year-on-year (y/y) up to end-August, which was the lowest growth since March 2010.

Growth in private sector credit extension slowed to 8,8% y-o-y from 9,8% in June, against the market forecast of 9,1%. Credit growth is likely to remain moderate in the short term, held back by weak household demand and some levelling off in corporate demand as the effects of the renewable energy programme fade.

Credit to households weakened further, while that to companies remained firm - although the growth rate moderated compared with July.

Growth in outstanding household mortgage balances (R823,6 billion) slowed down further to 2,2% y/y at end-August from 2,6% y/y at end-July. The value of household mortgage balances was R700 million lower at the end of August compared with the end of July.

In view of trends in and the outlook for the economy, household finances, consumer confidence and interest rates towards the end-2014 and in 2015, growth in household credit, including mortgage advances, is expected to remain relatively low over the next twelve to eighteen months.