CAPE TOWN – Several South African credit providers have noticed an increase in the number of clients who are struggling with their debt following recent increases in the cost of living, a financial services executive on Monday said.
According to Danny Zandamela, chief executive of Ithala, KwaZulu-Natal based financial services institution, South African consumers are not out of the woods yet with October being declared a “notoriously high-risk” month by economists and the rand coming under considerable threat.
He said October began with an untimely fuel price hike and yet another increase is expected in November. The weak performance of the rand coupled with the country plunging into a technical recession in September has already raised the red flag on consumer spending.
“As a financial services institution, one of our concerns is the lack of financial literacy among youngsters, which later in life leads to poor financial choices. Individuals that are not financially empowered often fall prey to the debt trap,” said Zandamela.
“Therefore, as Ithala, we are trying to bridge this gap by embarking on financial literacy programmes to inculcate money management skills and foster a culture of savings among the youth.”