• News
  • Sport
  • TV
  • Radio
  • Education
  • TV Licences
  • Contact Us
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION
No Result
View All Result
1
Home Business

‘South Africans spend 63% of their income to service debt’

18 October 2019, 3:03 PM  |
Naledi Molefi Naledi Molefi |  @SABCNews
Government has made it a priority to ensure a massive reduction in expenditure, which will seek to assist in improving the financial position the state.

Government has made it a priority to ensure a massive reduction in expenditure, which will seek to assist in improving the financial position the state.

Image: Reuters

Government has made it a priority to ensure a massive reduction in expenditure, which will seek to assist in improving the financial position the state.

South Africa is heading towards a debt bubble with many consumers spending most of their disposable income to service debt.

The National Credit Regulator’s second-quarter Credit Bureau monitor has revealed that consumers have debt amounting to R1.9 trillion as of June 2019.

Experts believe that some of this debt has been offered recklessly without accessing consumer’s level of indebtedness.

Many consumers are battling to cope with the high cost of living; soaring electricity, water, food, and transport costs are adding to the burden. Credit providers are capitalising on this by offering them credit that they cannot afford.

Some consumers see this as a quick fix to deal with their financial problems and do not scrutinise the interest they are being charged.

There are about 25.10 million credit-active consumers and about 10.23 million consumers have impaired records; meaning they are three months in arrears with their repayments.

Octogen Financial Services Director, Paul Slot says consumers are living beyond their means.   “There is no question that those consumers are living beyond their means and there is a belief that one additional loan would solve their problems.”

According to recent research conducted by Financial service company Octogen, consumers spend about 63% of their after-tax income to service debt and spend only 5% on financial services such as insurance and medical aid. 32% of their income goes to household expenditures such as groceries and transport.

Slot says that some people even resign just to access their pension funds. “The cost of living is increasing every day. The petrol price and electricity prices and there is an existing debt that they have and some even resign to get their pension funds.”

Consumers spend about 75% of their annual income to service debt.

Octogen says it has seen an increase in the number of people applying for debt review. A debt counsellor can negotiate a better interest rate for you with your credit providers, but you cannot take on more credit when you are under debt review.

Slot says some of the credit offered to consumers is reckless.

“I think reckless lending has not been pursued for many years and in terms of the NCA Amendment Act, this has to be done.”

Share article
Tags: DebtNational Credit RegulatorCredit Bureau monitor
Previous Post

Six suspected poachers arrested at Kruger National Park

Next Post

What limits? How African leaders cling to power for decades

Related Posts

People look at the new iPhone 15 Pro as Apple's new iPhone 15 officially goes on sale across China at an Apple store in Shanghai, China September 22, 2023.

Apple identifies issues causing overheating in the iPhone 15

1 October 2023, 4:45 PM
Electricity pylons.

Eskom announces further suspension of rolling blackouts

1 October 2023, 1:00 PM
A worker fills a car belonging to a Texas resident, with gasoline at a gas station, in Ciudad Juarez, Mexico March 14, 2022.

Automakers say they face $14 billion in fines from Biden’s ‘unfeasible’ fuel rules

30 September 2023, 3:51 PM
[File photo:] Someon holding a mobile device.

Parly committee describes cost of communication in SA as brutal and abusive

30 September 2023, 12:53 PM
Transnet logo

Transnet’s inefficiencies have made it a liability for government: Economist

30 September 2023, 11:26 AM
[File Image:] A domestic worker cleans a sink at a home.

Tough economic times leading to increased vulnerability of domestic workers

30 September 2023, 8:35 AM
Next Post
Alpha Conde

What limits? How African leaders cling to power for decades

Most Viewed

  • 24hrs
  • Week
  • Month
  • Mandla Mandela urges respect for Zoleka’s peaceful rest
  • Six beaches in Durban flagged with high levels of E.coli
  • Visitors planning to visit the Overberg region urged to postpone their trips
  • ‘Medupi power station has turned the corner’
  • Golden Arrow bus overturns as heavy rains continue in Cape Town
  • High waves and rough water conditions force beach closures in the Western Cape
  • Prince Mangosuthu Buthelezi to rest in the town he built and nurtured
  • NSPCA files criminal case against Julius Malema for alleged animal cruelty
  • Snow, heavy rainfall expected in parts of KZN: SAWS
  • Cold-front sweeps across SA bringing snow and chilly temperatures
  • Msukalikwa Local Municipality to face criminal charges
  • Springboks will this evening fight to remain in the World Cup
  • SA has the seventh highest level of organised crime in the world
  • Five killed in Kagiso vehicle crash
  • Malema describes eSwatini elections as a mockery of democracy

LATEST

Minibus-taxi on a route
  • South Africa

Several roads to be closed in Cape Town due to EFF march on Monday


Tables and chairs inside a classroom.
  • South Africa

BELA Bill will address issues such as admissions to schools: Motshekga


General Secretary of the SACP Solly Mapaila addressing attendees of the Red October campaign launch
  • Politics

SACP’s Red October campaign to focus on cost of living


SMER-SSD party leader Robert Fico speaks during a press conference after the country's early parliamentary elections, in Bratislava, Slovakia, October 1, 2023.
  • World

Slovakia’s poll winner defies European consensus on Ukraine


Veld fires in Southern Free State the largest in the history of the province.
  • South Africa

Three active fires still burning in Free State


People look at the new iPhone 15 Pro as Apple's new iPhone 15 officially goes on sale across China at an Apple store in Shanghai, China September 22, 2023.
  • Business

Apple identifies issues causing overheating in the iPhone 15


Weather

  • About the SABC
  • Contact Us
  • Jobs
  • Advertise
  • Disclaimer
  • Site Map

SABC © 2023

No Result
View All Result
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION

© 2023

Previous Six suspected poachers arrested at Kruger National Park
Next Alpha Conde What limits? How African leaders cling to power for decades