mobile menu mobile search

7 things you need to know about debt in South Africa

7 things you need to know about debt in South Africa

Statistics compiled by debt management firm, Debt Rescue show that South African consumers owe the bulk of their monthly salaries to creditors.

The group found that consumers owe as much as three quarters (75%) of their monthly pay to creditors, marking a 31% jump in new clients in need of debt rescue in the first six months of the year.

“This is clear evidence that a growing number of consumers are getting ever deeper into debt and need help from debt counselors to get out from under the debt mountain most of them had accumulated over the past years,” said Debt Rescue CEO, Neil Roets.

Seven findings about debt in South Africa:

  • Consumers owe as much as three quarters (75%) of their monthly pay to creditors;
  • More than half (53%) of respondents are in the age group 31-45, and there is a substantial spike (39%) in applicants who want to go under debt review who are under the age of 25;
  • Consumers who are struggling to pay their home loans currently stand at 56.86%;
  • Consumers who are battling to pay off their credit card debt are running at 58.83%;
  • As much as 38.67% of consumers who have a bank accounts do not know what interest rate they are getting on their savings accounts.
  • 22.19% of consumers have no idea of what they’re paying in banking fees;
  • Only 23.42% of South Africans have any money left at the end of the month- the other 76.58% are flat broke.

Further, Debt Rescue found that South Africans are “woefully ignorant” of their rights in relation to expired (prescribed) debt that does not have to be repaid, and the fact that credit providers are not allowed to collect on this debt.

“(This) is indicative of a lack of education and awareness of how important it is to understand at least the basics of financial management,” Roets said.

“We have found in our dealings with thousands of deeply indebted consumers over the years that a lack of understanding of simple things like credit agreements that were often very one sided and downright unfair played a major role in consumers becoming over-indebted in the first instance.”

Earlier data from the South African Human Rights Commission (SAHRC) showed that, of 19 million credit active consumers in South Africa, over half had impaired credit records, three months plus in arrears.

More than 11 million of South Africa’s credit active consumers were described as over-indebted, the SAHRC said.

More on debt

Rate hike will add to R1.4 trillion consumer debt in SA

How much debt do you have?

SA debt collectors in last-minute frenzy ahead of new law

Nearly 10 million SA consumers in debt


BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
Join the Conversation (10 comments)
  • Stephen Vigus

    “Further, Debt Rescue found that South Africans are “woefully ignorant” of their rights in relation to expired (prescribed) debt that does not have to be repaid, and the fact that credit providers are not allowed to collect on this debt.”
    Then why not share this information, instead of just pointing it out.

    • observer111

      He just did share it. If a debt goes three years without you acknowledging it or without the creditor making a formal legal demand to recover it, it prescribes.

  • kian

    dat credit card, those nikey takkies……….

  • Hahaha glad I owe nobody no cent! Cash is the way to go 😀

    • Hennie

      I’m just as lucky as you, but there was a time, that I was to my eyebrows into crap. Cash is king!!!!

  • MP3

    well with all the lovely new things the government is making us pay for – you know their flashy cars and such – it’s no wonder we’re poorer.

  • Alex

    People need to base their purchase decisions on what they can afford, not what the bank or the Mercedes dealership will grant them. This is how the whole financial markets crash happened in the first place. Everybody ready for round 2? I guess there really is no cure for stupid.

  • Spend your money wiser! Get cash back and shopping points of real value, back. Help a few others do the same and grow another income! You’ll soon beat any debt blues,, and grow !

  • kid black

    Pity. There’s money to made from using debt to buy the right assets.

  • samantha

    I’ve had nothing but SUCCESS from my Debt Review process.

    FEES: My debt councellor did not ask for an Application fee. She does not charge for the Credit Check, and after consultation I realised she also doesn’t charge a withdrawal fee if consumers want to withdraw either. The Restructuring fee was taken, but it was included in the monthly payment and I did not have to pay anything extra.

    She is also an attorney, which made it a lot easier to take on the accounts that are handed over. She negotiated with these creditors for NO extra fees!??!

    I’m now protected by law, and up to date with payments.

    (*remember if you try to negotiate yourself, you are not protected by law, they can still take action. you also still show that you are in arrears on your credit report, which will stay on there for up to 5 years, reflecting that you’re a bad payer.)

    If you’re wondering where I got help – I contacted “financehelp24.co.za”. They give free advice and quotations if you are just curious about the program.

    WORTH A SHOT!

Join our newest FREE BusinessTech newsletter today!
×