Women struggle with debt due to gender pay gap

Reading Time: 3 minutes

The National Debt Advisors has revealed that South African women are earning less and accumulating more debt compared to their male counterparts, primarily due to the country’s gender pay gap. This issue disproportionately affects women, particularly single mothers.

Statistics South Africa reports a 30 percent pay gap across various industries in the country. Dehan Scherman, Compliance Officer at National Debt Advisors, explains that women often bear the burden of managing debt, resorting to loans to bridge the income disparity between men and women.

Nearly 38% of South African households are led by women, with approximately 6.1 million homes primarily supported financially by women. NDA says these statistics are deeply concerning as the labour market in South Africa remains skewed in favour of men, resulting in significant gender disparities in employment opportunities.

Josephine Matsediso, a 60-year-old grandmother from Boksburg, Gauteng, shares her struggle as a single parent responsible for her grandchildren’s care:  “I was even blacklisted, so I couldn’t even borrow money from the bank or something. The challenge is the groceries, paying the municipality bills, electricity, whatever, and the petrol that is going up and down, like the bond,  I was owing, like, clothing and furniture. If I was not single here, it was going to be better because I’ll be having someone who’s helping.”

VIDEO | Gender pay gap is still a concern in South Africa:

Scherman says that the gender pay gap exacerbates financial struggles for women, leaving them with minimal disposable income after covering essential expenses. This predicament often traps women in a cycle of debt that is challenging to overcome.

“So, StatsSA confirmed that there’s roughly a 30% pay gap across all industries. So if you take that into account, together with the rise in cost of living and inflation, it starts painting a very bleak picture. The gender pay gap is a growing concern as it leads to an increased reliability on debt in order to survive. And the situation can easily result and over indebted females unable to afford to pay back their debt.”

He further notes that many women seeking debt counselling are burdened with unsecured debts, medical bills, and loans from predatory lenders. This situation not only hampers their ability to save but also perpetuates their reliance on borrowing for emergencies or daily expenses, making debt repayment a daunting challenge.

“We’ve seen a rise in the last year in single females that are seeking assistance with their debt. And this currently makes up 7% of our client base. Interestingly enough, we see very few of them have been in sort of secured debt. So there’s only 2 .7% that have vehicle finances. There’s only 0 .8% that have home loans. Majority or the big portion of their debt makes up unsecured debt. So these are payday loans, these are personal loans, even credit cards,” adds Scherman.

Closing the Gender Gap Dialogue: