Latest AFSCI Index shows credit extension increase

Keith Lockwood, Independent consultant talks about Altron FinTech’s latest Short-term Credit Impact (AFSCI) Index for the third quarter of 2022 shows a 0.9% quarter-on-quarter increase in net short-term credit extension. <br /> <br /> <br /> <br /> The index tracks the impact of short-term credit extension on the South African economy on a quarterly basis. <br /> <br /> <br /> <br /> “Based on National Credit Regulator (NCR) data for the second quarter of 2022, there was a significant increase of almost 10% in the AFSCI Index when compared with the first quarter of the year. However, relative to a year earlier, the index is down just over 1%,” says independent economist Keith Lockwood. <br /> <br /> <br /> <br /> Data from trends in short-term credit extension that are now supported by data from Altron FinTech, providing a useful indicator of likely trends in the third quarter of 2022, points to a further quarter-on-quarter increase in net short-term credit extension of 0.9% in the third quarter of 2022. <br /> <br /> <br /> <br /> <br /> Another key finding is that, while short-term credit made 12% less of an impact on the economy in the second quarter of 2022 than it did at the start of 2015 – the baseline year of the index – it is now making 111% more of an impact than it did at the height of the Covid-19 lockdowns in the second quarter of 2020. <br /> <br /> <br /> <br /> “The South African economy was impacted by a range of developments in the second and third quarters of 2022. Russia’s invasion of Ukraine further disrupted global supply chains – already impacted by Chinese Covid-19-related lockdowns – causing food and energy commodity prices to spike,” says Lockwood. <br /> <br /> <br /> <br /> “This contributed to rapidly rising inflationary pressures and monetary tightening both globally and in South Africa, which caused the post-Covid-19 recovery to lose momentum. Many countries, particularly those where household debt to disposable income levels are already at historically high levels, are experi