A report by the National Credit Regulator tabled in Parliament shows that 40% of credit active South Africans have bad debt.
A bad debt is an amount owed to a creditor that is unlikely to be paid back and/or which, for various reasons, the creditor is not willing to recover it, often due to the debtor not having money to pay.
South Africa has 25.7 million credit-active consumers, with 15.5 million in good credit standing.
The Congress of South African Trade Unions’ parliament Coordinator, Matthew Parks, says slow economic growth compounds debt.
“Part of the problem compounding is that the average worker supports seven unemployed relatives. So if you deal with the jobs, we can deal with the debt issue. Parliament recently passed and the President signed the National Credit Amendment Act which tries to deal with the problem. It criminalises the ‘mashonisas’ (loan sharks) sector. So we want the DTI and the National Credit Regulator to indicate when they will bringing regulations to deal with the ‘mashonisas’,” says Parks.