South Africans’ net income has declined markedly in real terms since 2015 and consumers are making up the shortfall by large-scale borrowing, with average debt levels increasing 13% more than average income levels.
This is one of the headline findings in DebtBusters’ latest quarterly debt report for Q4 2019.
The report found that people who applied to the company for debt counselling during 2019 had, on average, 15% less real net income compared to those who applied in 2015.
The picture for higher-income earners – those pocketing over R20 000 a month – was worse. These consumers were bringing home 20% less in real terms than their counterparts in 2015.
The other significant finding is that these consumers are funding their lifestyles by taking out considerable unsecured credit, to the extent that this is beginning to outweigh asset finance, such as home loans and car finance, says Benay Sagar, DebtBusters’ Chief Operating Officer.