Capitec Bank is concerned that the rising number of over-indebted consumers is limiting its ability to lend amid interest rates that could top 80 percent.

The value of consumer loans not backed by assets surged 39 percent in the year to September to R140 billion, according to the National Credit Regulator. The loans accounted for 10 percent of consumer credit at the end of September.

In the UK, growth in unsecured lending “has been negative for the majority of 2012” on a three-month annualised basis, according to a Bank of England quarterly report.

“Nearly a third of people walking into our doors are so over-committed, or… have such a bad credit record, that we are unable to extend to them any form of credit,” Riaan Stassen, the chief executive of Capitec, said on Wednesday. “We believe that this is a very good indication of what is happening in the broader market.”

More than 9 million South Africans have a bad credit history, with the government pushing for new regulations to protect consumers and banks amid social unrest and strikes. The Banking Association of SA and the Treasury are forming teams to draft new rules that will probably be ready by the second quarter, according to Cas Coovadia, the head of the banking association.

Bayport, a unit of Transaction Capital, cut the number of new loans by 29 percent in November from a record a month earlier, while the value of those loans fell 19 percent, according to data on its website. Non-performing loans at African Bank Investments, the biggest lender of unsecured debt, climbed 38 percent to R15.2bn, a record high, in the year to September.

The total number of unsecured loans granted fell 2.4 percent in the third quarter from the previous three months, according to the most recent report from the credit regulator, released last month.

While Capitec will extend an unsecured loan of as much as R230 000, Nedbank has kept its unsecured loans capped at R120 000 for more than four years. “We would be comfortable to lose market share at this point in the unsecured lending cycle,” Mike Brown, Nedbank’s chief executive, said on Friday. Growth in the loans has peaked and should slow this year, according to Brown.

“People are living a little bit beyond their means, and it’s easy for them to do so at first but later it catches up with them,” Mike Schussler, the chief economist at, said on Thursday. “These levels of unsecured lending are unsustainable.”