The divergence nobody is talking about
The latest Centrix Credit Indicator report, released today, delivers a reassuring top line. Consumer arrears fell to 11.72% of the credit-active population in March, down from 12.09% in February. The total number of people behind on payments dropped to 459,000. Year-on-year, the improvement is 7.1%.
But underneath that improving average sits a stubborn, growing cohort. 95,000 consumers are now 90-plus days in arrears, the category credit professionals treat as seriously impaired. In July 2025, that figure stood at 81,000. By October 2025, it had risen to 84,000. In February 2026, it peaked at 97,000, the highest since July 2023.
The OCR has fallen from 5.5% to 2.25% over this period. The people who could be saved by cheaper money have been. The 95,000 who remain are beyond the reach of monetary policy.
Credit cards are flashing a warning
The product-level data tells a more nuanced story than the aggregate. Mortgage arrears eased to 1.39% in March, helped by a 40.1% year-on-year surge in new mortgage lending as borrowers refinance onto lower rates.
But credit card arrears moved the other direction, rising to 4.2%. When mortgage stress eases but credit card delinquency ticks up, it typically signals households managing secured debt by falling behind on unsecured obligations. Personal loans sit at a 10% arrears rate. Vehicle loans are flat at 5.6%. Buy Now Pay Later sits at 8.8%, nearly one in nine users behind.
The pattern is clear. Borrowers with equity and income are refinancing their way out of trouble. Those without are rotating debt between products until they run out of options entirely.
Two economies in one set of numbers
The new lending data makes this bifurcation explicit. Household lending is up 38.2% year-on-year. Creditworthy borrowers are taking on new debt at lower rates, buying houses, and spending. The 95,000 in serious arrears are locked out of this market entirely. They are not refinancing. They are not spending discretionarily. They are, in many cases, structurally insolvent.
Geography sharpens the divide. Kawerau district leads nationally at 17.55% consumer arrears, nearly 50% above the national rate. Businesses in these regions are not serving the same customer base as their Auckland counterparts.
The tailwind may already be fading
Centrix COO Monika Lacey flagged that “recent Middle East events had altered the outlook for inflation and growth”. The Reserve Bank held the OCR at its last meeting. ASB has cut its 2026 GDP forecast and pushed recovery into 2027. If energy prices push inflation higher, further rate cuts may be delayed.
The businesses most exposed to this tail are the same ones already under pressure. In October 2025, company liquidations hit their highest monthly level since 2011, with construction and hospitality leading. These are sectors that depend on household spending, and 95,000 households have stopped spending.
What this means for anyone extending credit or chasing revenue
Retailers, hospitality operators, and utility providers planning for a broad-based consumer recovery are misreading the data. The recovery is real but it is narrow, concentrated among borrowers with equity, income, and access to cheaper refinancing. The seriously distressed tail is not shrinking. It grew through nine months of aggressive rate cuts and has barely retreated.
For lenders, provisioning assumptions built on the improving headline figure are optimistic. For collections teams, the persistence of 90-plus day arrears despite 325 basis points of OCR cuts suggests these are not temporarily illiquid borrowers waiting for relief. They may already be beyond recovery. The national average is a fiction. Plan for the customer base you actually have.
Sources
- Centrix data: Consumer arrears fall but 95,000 borrowers in serious debt (2026-04-30)
- Credit backdrop steadies as new lending stays strong (2026-04-01)
- Centrix Credit Indicator Report – November 2025 (2025-11-30)
- Centrix Credit Indicator Report – August 2025 (2025-09-01)