Almost 80% of South Africans seek expensive unsecured loans to help them meet their monthly financial obligations, according to a survey by fintech platform PayCurve.<\/p>\n
Many people are forced to work two jobs, if they are able to find any, and they take loans to buy food, cover emergency expenses, such as vehicle repairs, and pay for school-related fees, according to the survey that was completed by 509 South Africans aged 16 to 66.<\/p>\n
The findings highlight South Africans\u2019 deteriorating finances in an economy that was already in a recession, with a third of the labor force unemployed, before the first Covid-19 case was confirmed.<\/p>\n
Central bank data shows household debt stood at 73.7% of disposable income in the first quarter and the cost of servicing these obligations consumed 9.3% of households\u2019 income.<\/p>\n
These are some of the other findings by PayCurve, which helps companies provide staff with early access to a portion of their salaries:<\/p>\n
DebtBusters, a company that helps consumers restructure their loans, paints an even bleaker picture.<\/p>\n
It found that the 1.6 million South Africans who took advantage of payment holidays offered by financial institutions during the country\u2019s coronavirus lockdown from April to June will pay an additional R20.7 billion ($1.18 billion) in debt.<\/p>\n
\u201cIn a country as over-indebted as South Africa, especially at a time when the economy is contracting, this is enough to push people who were just about making ends meet into a situation where their debt-to-income ratio is unsustainable,\u201d Benay Sager, DebtBusters\u2019 chief operating officer, said.<\/p>\n