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Grim debt stats for SA citizens

Published Jun 9, 2016


Nicolette Dirk

ONLY 23% of South Africans have money left at the end of the month, year-long research by Debt Rescue has shown.

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The report was compiled to establish consumers’ levels of over-indebtedness and the types of debt they incurred.

Debt Rescue’s chairperson, Neil Roets, said most people battled because of debt repayments. “More than half of consumers have to use 75% of their salary to make debt repayment,” said Roets.

The World Bank’s Global Findex Database report showed 86% of South Africans borrowed money – the highest in the world.

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The research also found that people between the ages of 31 and 45 had the most debt. This age group also were more inclined to have family members depending on them financially. “South Africans also don’t have a culture of saving, and they don’t budget correctly,” said Roets.

While people with a lower income would resort to reckless lending, Roets said middle and high-class consumers spent a big portion of their money repaying credit agreements.

Consumers used 38.9% of their income to repay personal loans, which the survey found was the biggest debt. Personal loans also far outnumbered all other types of debt for all age groups.

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Credit Ombud deputy director, Riana Steyn, said they dealt with heartbreaking complaints from consumers who could not afford to repay credit providers.

“While the cost of living is rising, salaries remain the same,” said Steyn.

She said their department often found mistakes in the calculation of repayments where people ended up paying double the amount that they should.

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She said they had recently received many complaints about reckless lending, likely because people were becoming more aware of their rights.

“We will approach the credit provider and negotiate a repayment,” said Steyn.

The Credit Ombud can be reached on 086 166 2837.

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