According to data published by the South African Institute of Race Relations, the type of credit extended by formal financial institutions shows that while levels of vehicle and
\nhome financing have increased by 33.3% since 2007, the levels of personal loans and overdrafts have increased by 100%.<\/p>\n
“This is a warning on the possible over-extension of households which will be compounded by interest rate hikes,” the IRR said.<\/p>\n
This, the institute warned, is a flickering red light over South Africa\u2019s economy particularly in a decade that is likely to see sharp interest rate hikes.<\/p>\n South Africans are the most desperate for money in the world<\/a><\/strong><\/p>\n How much debt do you have?<\/a><\/strong><\/p>\n Why we struggle to save in South Africa<\/a><\/span><\/strong><\/p>\n![\"Formal](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/11\/Formal-credit-assessed.png\")
<\/a>It noted that household debt to disposable income in the country has risen from 56.5% in 1994, to 78.3% in 2014, although down from a peak of 82.4% in 2008.<\/p>\n![\"Change](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/11\/Change-in-formal-credit.png\")
<\/a>The IRR pointed out that 90% of credit is secured. The majority of this is in the form of mortgage loans with the balance coming from other forms of secured credit.<\/p>\n![\"Total](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/11\/Total-outstanding-credit.png\")
<\/a>“However, the data also shows that the rand amount and proportion of total credit that is unsecured has roughly tripled since 2009,” it said.<\/p>\n![\"Total](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/11\/Total-outstanding-credit-graph.png\")
<\/a><\/p>\nMore on debt in SA<\/h3>\n