Johannesburg - The high unemployment rate is worsening over-indebtedness among consumers, the Credit Ombud said on Thursday.
“Many people simply can’t find work and this is affecting households’ ability to pay back their debts,” said Credit Ombud Manie van Schalkwyk.
“We’re seeing high levels of over-indebtedness across the country.”
Van Schalkwyk was commenting following the release earlier in the week of the latest Quarterly Labour Force Survey (QLFS), which showed that the country's workforce decreased by 235,000 people between the third and fourth quarters of 2012.
The QLFS is a household-based sample survey conducted by Statistics SA and covers the labour market activities of people aged 15 to 64.
The latest survey covers the period from October to December.
It found that in the third quarter (July to September last year), the South African labour force numbered 18.313 million, but that this dropped to 18.078m in the fourth quarter.
Van Schalkwyk said the National Credit Regulator had reported that of the 19.69m credit-active consumers, more than 9.25m (47
percent) had impaired records.
He warned consumers who had lost their jobs and were unable to find work to contact their credit providers and inform them of their change in circumstances.
“Credit providers are more likely to be willing to negotiate lower repayment terms the sooner they are told about your loss of income,” said Van Schalkwyk.
“Once you are three or more months in arrears, it may be too late and you could be negatively listed at a credit bureau.”
Many consumers applied for credit, assuming their income was secure, but did not plan for loss of income, Van Schalkwyk said.
He advised consumers to prioritise their debt, to redo budgets to and use their redundancy package wisely. - Sapa