Number of South Africans unable to keep up with debt payments: Stats SA

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Statistics South Africa says the number of civil summonses issued for debt increased by 3.5% in the three months ended October – when compared to the same time last year.

The number of civil judgments recorded for debt also increased by 0.9% in the same period.

The tough economic conditions have forced many businesses to shut their doors forcing many out of jobs. The largest contributors to the 3.5% increase in civil summonses issued were promissory notes, money lent and other debts.

While the largest positive contributors to the increase in civil judgments were relating to promissory notes and money lent.

Debt Busters’ Benay Sager elaborates, “As many of the consumers who came off the bank payment holidays and also more recent increases in inflation, significant increases in petrol prices as well as increases in the repo rate, we think we are going into the cycle of increases. That seems to put a lot of pressure on consumers.

“From an earning perspective, what we also see is that salaries today are at the same level as they were 5 years ago – what this means is nominal terms. There are more or less the same. We certainly see many more consumers looking for options to alleviate the debt issue that they have.”

‘Debt situation deteriorating’

A third-quarter debt index from Debt Busters reveals that South African consumers’ debt situation is deteriorating, as people continue to turn to unsecured credit to supplement their paycheques.

“Many of the service providers in 2021 didn’t necessarily increase their prices if you think about insurances and schools and so on, but in 2022 they will have to most probably increase their prices as the input costs increase, you alluded to petrol, petrol today costs more than 40% more than it cost on the first of January this year. And it’s not a cost that many of our consumers can deal with. If you add on top of that the lack of salary increases, probably, very few people will get bonuses this year, consumers are going to be very stretched unfortunately in 2022,” Sager explains.

Stats SA says in October alone close to 13 000 civil judgments for debt amounting to R338 million were recorded.

The largest contributors to the total value of judgments were money lent, services and other debts.

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