Durban - More than half of South Africans say they won’t be able to pay at least one bill in the next three months, according to the Quarterly TransUnion Consumer Pulse study.
According to TransUnion research, 56% of South African consumers said they would not be able to pay at least one of their current bills and loans in the next three months.
The research was conducted between late May and early June.
TransUnion also found that with rising inflation rates and interest rate hikes on the horizon, 52% of households will cutting back on their discretionary spending.
However, 31% of respondents reported found that their household improved in the last three months.
On the other hand, 26% of respondents in the study said their household income decreased in the last three months.
Lee Naik, CEO of TransUnion Africa, said: “The improvement in household income was largely due to South Africa’s unemployment statistics dropping from a record-high of 35.3% to 34.5%2.”
“At the start of Q2, the South African annual inflation rate was at 5.9%, consistent with levels observed in prior months and aligned with market forecasts. However, this is the 12th consecutive month where annual inflation has been at the higher end of the median of the South African Reserve Bank’s (SARB) target range of 3%–6% at 6.5%,” Naik said.
For consumers in the country, ongoing rate increases means expensive monthly repayments on debt obligations, on top of rising food and fuel prices.
Credit
In the survey, 93% of respondents said they believe access to credit and lending products is important to achieve their financial goals. However, only 42% said that they had access to credit, while 40% of consumers were planning on applying for new or refinancing existing credit.
51% of consumers decided against applying for credit or refinance existing credit.
The reasons for not going through with the credit application include:
– high costs (32%)
– finding an alternative funding source (27%)
– belief that the application would be rejected due to their income or employment status (25%).
Managing credit
According to the survey, 89% of consumers said monitoring credit is at least moderately important, while 62% said that they monitor their credit at least once a month.
“It’s critical that consumers keep tabs on their credit report to stay on top of their finances during these challenging economic times,” said Naik.
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