Unsecured loans accounted for 21.4 percent of all new loans in the third quarter of 2011 — up from 7.8 percent at the end of 2007.
This is according to the 2012 Budget Review document, tabled by Finance Minister Pravin Gordhan in the National Assembly along with the 2012/13 budget on Wednesday.
Over the same period, mortgage loans fell to 30.3 percent of new loans, from 51.9 percent, as uncertainty, high levels of household debt and falling house prices made banks less willing to extend longer-term credit.
Growth in unsecured lending partly reflects changes in the regulatory framework governing short-term loans, following the introduction of the National Credit Act.
Previous limits on loan size (R10 000) and repayment duration (up to 36 months) fell away.
Most unsecured lending is directed towards high-income earners who have more job security, which may reduce household and bank vulnerability.
The National Credit Regulator is satisfied that banks are complying with the principles of the Act and not engaging in reckless lending.
These trends should be monitored to ensure that consumers' growing reliance on unsecured debt does not become a systemic risk, the review states.