The number of South African consumers taking up debt has decreased. According to Stats SA, civil summons and judgments for debt has seen a significant decrease since 2017.
The total number of civil summonses issued for debt decreased by two-point-eight percent in the third quarter of 2018 compared with the third quarter of 2017.
The largest contributors to the decrease were civil summonses relating to goods sold and money lent.
The latest figures from Stats SA show that the total number of civil judgments recorded for debt decreased by almost six percent in the third quarter of 2018. This compared with the third quarter of last year.
Economists say the amount of credit to household income has been decreasing over the past 11 years. This, as a result of tougher regulation like the Consumer Protection Act. Consumers are also more aware of their financial positions and are saving more.”
Meanwhile, the National Credit Regulator has warned that despite a decrease in civil summons and judgments, the number of people who have impaired records are still high.
The regulator says there are almost ten million consumers with impaired credit records. This is out of the 24 million credit active consumers.
Jimmy Golele is Acting Manager at the NCR says, “While statistics from Stats SA show that there is a decline the number of people taking out credit that could be attributed to the economic situation however the number of people with bad records is not necessarily going down and that could be due to the same bad economic conditions and more people are losing their jobs. And finding it more difficult to keep up with their obligations.”