How much debt do you have?

 ·20 Mar 2015

With the likelihood of a massive petrol price hike in April, how much longer can South Africans keep stretching their budgets before reaching breaking point?

Earlier this month, the SA Human Rights Commission (SAHRC) noted that, of 19 million credit-active consumers in South Africa, 50% had impaired credit records three months or more in arrears.

According to the National Credit Regulator (NCR), credit bureaus hold the records for approximately 22 million credit-active consumers.

Consumers classified in good standing stood at just more than 12 million consumers in 2014, with the number of consumers with impaired records at around 10 million.

The number of accounts were at around 80 million, while the number of impaired accounts stood at about 21 million.

Neil Roets, CEO of debt management company Debt Rescue says that based on client information, the biggest number of accounts are unsecured debt.

Unsecured debt is a loan not backed by an underlying asset, like your house or car. It includes credit card debt, medical bills, utility bills and any other type of loan or credit that was extended without a collateral requirement.

“We are seeing a continued increase in pay-day loans – loans that have to be repaid in full at the end of the same month as being taken – as well as short to medium-term personal loans from all the major credit providers, Roets said.

He said that the average applicant for debt rescue has 14 unsecured accounts, one vehicle, and one property.

The average age of an applicant is ‘early forties’ with the bulk between 35 and 45. Gender shows a fairly equal split.

The average total debt exposure is as follows:

  • Clients with mortgages : R950 000
  • Clients without mortgages : R240 000

SA credit bureau, Compuscan published its own data in March relating to consumers’ credit behaviour in Q4 2014.

It found that at the end of Q3 2014 there were 2,015,276 accounts listed as handed over, assets repossessed, account written off or facilities/credit card revoked.

There are now 3,139,687 such accounts, which means that there was a 56% increase in adverse account listings in one quarter, it said.

Additional findings from Compuscan on the credit behaviour of SA consumers:

Vehicle and asset finance for Q4 2014
Less than or up to  R50 000 3%
R50 001 – R100 000 11%
R100 001 – R250 000 51%
R250 001 – R400 000 21%
R400 001 – R999 999 14%
R1 million+ 1%
Total no. of VAF loans in retention on the bureau 2 314 462
Credit cards for Q4 2014
Less than or up to  R5 000 21%
R5 001 – R15 000 28%
R15 001 – R25 000 16%
R25 001 – R40 000 16%
R40 001+ 19%
Total no. of credit cards in retention on the bureau 6 094 966
Store cards for Q4 2014
Less than or up to  R5 000 57%
R5 001 – R15 000 36%
R15 001 – R25 000 6%
R25 001 – R40 000 1%
R40 001+ 0%
Total no. of store cards in retention on the bureau 16 494 066

More on debt in SA

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

Nearly 10 million SA consumers in debt

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