Consumer Debt Rising
Debt Counselling South Africa
Debt Counselling, debt help, debt relief
Four key reports have found that South Africa's consumers are in for a rough ride which is going to translate into more consumers falling ever deeper into the debt trap.
Jo Stone, CEO of Debt Counselling South Africa and Sandton Debt Counselling, a group of debt relief companies said the reports by the International Monetary Fund (IMF), the World Bank, The South African Reserve Bank and the TransUnion Consumer Credit Index all found that consumer debt levels were high and rising.
"They largely concur that the South African economy is slowing down and that debt levels are skyrocketing which all translates into a very bleak future for deeply indebted consumers," Stone said.
The report by Credit information company TransUnion said the fall in their index reflected deteriorating household cash flow as rising living costs and a weak job market take their toll on income security.
It showed conclusively that "consumer credit health" continued to deteriorate.
It reported that consumer loan defaults continued to rise and that the number of civil summonses for debt - which is the first legal step in the recovery of debt - jumped by 5.6% year on year in July to 78,908.
Stone said total consumer debt was now topping R1, 44-trillion (according to Statistics South Africa).
"We are already seeing a dramatic growth in the number of people who are seeking protection from their creditors by going under debt review. There has also been a significant growth in the number of consumers who are having their salaries docked by garnishee orders and who are being blacklisted because of judgements against them."
He said rising food and fuel costs and slow economic growth are making it difficult for many South Africans to pay back their loans on time. One in every four South Africans is unemployed and the number of borrowers with impaired credit records - three or more payments in arrears - has risen to nearly 50 percent.
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