South Africans are struggling to pay off these loans right now

The latest findings from the research Consumer Pulse Report by TransUnion shows that the civil unrest, looting and the third wave of the pandemic have knocked the finances of South Africans.

TransUnion’s online survey of 1,100 adults in South Africa, found that 61% of respondents had their household income negatively impacted due to these and other factors.

The main reasons household incomes decreased was as a result of job loss, and reduced salary and work hours.

In particular, 38% of all surveyed consumers said someone in their household lost their job, 34% indicated someone in their household had their salary reduced, and 29% had work hours cut in the past month.

“A staggering 42% of lower-income consumers – households earning less than R50,000 per annum – indicated someone in their household lost their job in the past month. Of consumers who said their household income is currently decreased, 87% remained highly concerned about their ability to pay their bills and loans.”

The data shows that 47% of respondents expect they will be unable to pay at least one of their current bills and loans in full.

A further 41% of all consumers surveyed reported they’ve been in arrears for a bill or loan in the past three months, indicating just under half of the consumers are still struggling to make payments.

The data shows that credit obligations remain the top concern when it comes to paying bills:

  • 47% of all consumers with Mashonisa loans reported they’re unable to pay that loan;
  • 41% of private student loan holders;
  • 38% of personal loan holders;
  • 35% of retail accounts and credit cardholders.

The largest number of respondents (42%) said that they were currently ‘in limbo’ as their household incomes have decreased, and they will unsure if their finances will recover.

A similar number of people (40%), said that their finances have taken a knock, but they are hopeful of recovery. Just 1% of respondents said they were better off than planned in 2021.

Looking at a longer-term picture, TransUnion’s data shows that previous higher levels of optimism have decreased, likely as a result of the unrest and riots which took place in July.

A lower 69% of South Africans remain optimistic – down six percentage points from June, and seven percentage points from March.

The proportion of consumers who are confident their household finances will fully recover in the next 12 months dropped from 52% in June to 47% in August.

Read: South Africa’s economy is a Fiat Uno trying to be a Ferrari: economist

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South Africans are struggling to pay off these loans right now