Bad Credit On the Rise Again?
The latest stats show that nearly half of all the credit users in South Africa have been missing payments and are having trouble paying their debts.
27 Million South Africans use credit each month. Out of this rather large number, which far exceeds the number of people who are employed in South Africa, 48% are having a hard time keeping up regular debt repayments. A very large percentage have not made payments for 3 months or more on, at least, some of their debts.
Recently, a study conducted by Genesis Analytics revealed that 43% of the people surveyed are using credit to buy needed food each month. Particularly is this the case with lower-income consumers.
people…are using credit to buy needed food each month
Although the majority of people they interviewed say they use the banks (formal credit providers) the majority of consumers also said they make use of family and friends as well as illegal, unregistered loan sharks.
Back To Old Patterns?
During the initial stages of the Covid-19 lockdown consumers were able to focus on debt repayments since they could not spend money elsewhere. Later, banks extended payment holidays and reductions which also helped consumers avoid payment issues. Now it seems consumers are resuming old habits and are leaning heavily on credit (and many are missing payments again).
If you are having similar challenges speak to a Debt Counsellor for advice on how to get out of the debt spiral.