{"id":371694,"date":"2020-02-06T15:15:18","date_gmt":"2020-02-06T13:15:18","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=371694"},"modified":"2020-02-06T15:15:18","modified_gmt":"2020-02-06T13:15:18","slug":"south-africas-middle-class-has-a-massive-debt-problem","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/371694\/south-africas-middle-class-has-a-massive-debt-problem\/","title":{"rendered":"South Africa&#8217;s middle class has a massive debt problem"},"content":{"rendered":"<p>South Africans\u2019 net income has declined markedly in real terms since 2015 and consumers are making up the shortfall by large-scale borrowing, with average debt levels increasing 13% more than average income levels.<\/p>\n<p>This is one of the headline findings in DebtBusters\u2019 latest quarterly debt report for Q4 2019, which shows that middle-class South Africans have been some of the hardest hit.<\/p>\n<p>The picture for higher-income earners \u2013 those pocketing over R20,000 a month \u2013 is worse. These consumers were bringing home 20% less in real terms than their counterparts in 2015.<\/p>\n<p>&#8220;The other significant finding is that these consumers are funding their lifestyles by taking out considerable unsecured credit, to the extent that this is beginning to outweigh asset finance, such as home loans and car finance,&#8221; said Benay Sager, DebtBusters\u2019 chief operating officer.<\/p>\n<p>Sager said that average unsecured debt levels are 40% higher on what we were seeing four years ago. For higher-income earners, it is 50% up.<\/p>\n<p><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2020\/02\/Debtbusters.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-371720 aligncenter\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2020\/02\/Debtbusters.png\" alt=\"\" width=\"1089\" height=\"628\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2020\/02\/Debtbusters.png 1089w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2020\/02\/Debtbusters-300x173.png 300w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2020\/02\/Debtbusters-1024x591.png 1024w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2020\/02\/Debtbusters-768x443.png 768w\" sizes=\"auto, (max-width: 1089px) 100vw, 1089px\" \/><\/a><\/p>\n<p>The report found that in Q4 2019 DebtBusters\u2019 clients needed 64% of their net income to repay debts. The average client\u2019s debt-to-income ratio was 110%, but for those earning R20,000 or more a month it was 134%.<\/p>\n<p>&#8220;This is unsustainable, and it\u2019s become worse over the past four years,&#8221; Sager said.<\/p>\n<p>Despite the high level of over-indebtedness, the country has a sophisticated and effective debt counselling sector.<\/p>\n<p>&#8220;The number of clients successfully completing debt counselling has increased by 60% per annum over the past four years. There\u2019s no doubt that it works well to help people escape the burden of debt,&#8221; Sager said.<\/p>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/finance\/370920\/get-ready-for-the-taxman-dawie-roodt\/\" target=\"_blank\" rel=\"noopener noreferrer\">Get ready for the taxman \u2013 Dawie Roodt<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>South Africans\u2019 net income has declined markedly in real terms since 2015 and consumers are making up the shortfall by large-scale borrowing, with average debt levels increasing 13% more than average income levels.<\/p>\n","protected":false},"author":10,"featured_media":82401,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[13165,26],"class_list":["post-371694","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-debtbusters","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/371694","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=371694"}],"version-history":[{"count":11,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/371694\/revisions"}],"predecessor-version":[{"id":371698,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/371694\/revisions\/371698"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/82401"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=371694"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=371694"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=371694"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}