Short-term credit rises in second quarter
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THE extension of short-term credit, deemed a key financial instrument for low-income households and micro businesses, increased by 8.6 percent between the second quarter of last year and the second quarter this year, resulting in an estimated economy-wide increase in sales of R459 million, an additional 800 jobs being created and government collecting R56m more in taxes.
The net value of short-term credit (new loans less loans repaid or written off) was also 2.7 percent higher in the second quarter than in the previous quarter.
This was revealed in the results of the quarter two AFSCI (Altron Fintech Short-term Credit Impact), released on Tuesday. Altron Fintech developed the AFSCI in partnership with Keith Lockwood, independent economic consultant and adjunct faculty member of the Gordon Institute of Business Science.
Lockwood said this week that there could be significant upside benefit to the economy if the value of short-term credit advanced was raised by R1 billion.
He said sales throughout the economy would increase by R2.9 billion, employment supported would rise by close to 50 percent, to more than 15 000 jobs, and the government could expect to collect around R340m in additional taxes.