The South African Bank Lending Practices Survey, measures lending sentiment of senior credit practitioners across the banking industry and continues with its three themes of household lending, enterprise lending and the strategic direction of banks.
Local South African bank assets grew by approximately R229 billion since the previous survey. In line with their strategic direction, provided in the previous survey, banks allocated more of this funding towards households than enterprises. This trend is set to change as banks indicated that their preference going forward would be to move away from household lending towards enterprise lending. Enterprises seeking property finance and debtor finance could be expected to benefit most from this shift. Banks also indicated that the construction sector, although having recovered, had the most stringent credit stance, with mining and quarrying moving into negative territory from the previous survey.
From a series of topical questions, it was clear that there was a significant decline in sentiment towards coal projects in South Africa favouring credit in renewable energy. Digitalisation had no impact on sentiment towards credit lending to households, however banks acknowledged that short-term loans to enterprises had benefited from digitalisation. Banks indicated that the National Treasury strategic growth plan had a beneficial effect in the provision of finance to enterprises.