While home owners across the board are struggling to repay their bonds, loans for home improvements among low income earners have reached an all-time high.
Eddie Stoop, chief executive of the Elite Group, a wholly owned affiliate of AltX listed group African Dawn Capital, said the past six months had been record months for the company with growth in the double digit numbers.
Owners of properties below R400000 are reaching record highs.
He said for reasons that are not immediately clear, lower income earners of cheaper homes - often in the affordable category - are spending modest sums of money on improving their homes. Most of the loans were between R8000 and R20000 and were made available on an unsecured basis.
"Most of the customers would not even get through the front door of the big four banks because of their modest earnings and because in many cases they lacked the collateral to secure even small loans.
"Because we have been in the micro lending industry for a long time and have the administrative resources to check a client's entire credit and employment history, including whether he or she has been adversely listed on a credit bureau, we are able to transact the deal entirely over the telephone."
While interest rates are high - up to 3 percent a month - borrowers only need the cash for a limited period of time and the majority pay back their loans in around six to 36 months.
"We are unique in the financing industry in that our clients do not need to come to our offices to apply for a loan.
"Once we have approved his or her application, the money is paid directly into a bank account and they can draw it immediately at any ATM countrywide."
Stoop said targeting the home improvement industry has been a remarkable success story with turnover virtually doubling every month.