Shocking revelations about debt stressed South Africans

South Africa has reached its highest levels ever in terms of people with impaired credit records.

This was noted by SACP general secretary Blade Nzimande, citing a report by the National Credit Regulator.

Nzimande pointed out that there are 19 million credit active South Africans who have such impaired credit records, while more than 11 million were categorised as over-indebted.

“In the housing sector, it is estimated that around 10,000 homes are being repossessed by the banks annually in South Africa. This level of eviction can only be comparable to apartheid-era Group Areas removals,” he said.

As at  March 2015, the NCR said that credit bureaus in SA held records for 23.11 million credit-active consumers; with 10.4 million consumers having impaired records.

As of the same period, more than 663,000 consumers applied for debt counseling and more than 348,000 were recorded as active consumers under debt review.

A total of 336.08 million enquiries were recorded by the credit bureaus for the first quarter of 2015 with 12.76 million of the total enquiries made in instances where the consumer was seeking credit.

As at 31 March 2015, 4,577 credit providers with 47,372 branches, 14 credit bureaus and 2,224 debt counsellors were registered with the NCR.

The NCR’s data showed that South African consumer debt has increased to R1.63 trillion in the second quarter of the year.

Worryingly, despite a majority of credit active consumers are in good standing with debt payments, almost 45% are struggling to meet their repayments.

According to data from debt management firm, Debt Rescue, in August, consumers owe as much as three quarters (75%) of their monthly pay to creditors.

Over 56% and 58% of consumers struggling to pay off home loans and credit card debt, respectively, increasing the need for debt counselling, the group said.

Putting south Africa’s consumer debt into perspective, the amount equates to $118 billion – this is larger than the total GDP output of some countries, such as Angola ($107 billion), and in range of Morocco ($130 billion).

More on debt in South Africa

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