SA Lockdown: Consumers take on debt to get by

More and more South Africans are turning to credit to make it through the month. According to a survey by PayCurve, almost 80 percent of South Africans look for expensive unsecured loans to help them meet their monthly financial obligations. Courtesy #DStv403

JOHANNESBURG - More and more South Africans are turning to credit to make it through the month.

According to a survey by PayCurve, almost 80-percent of South Africans look for expensive unsecured loans to help them meet their monthly financial obligations.

The finding highlight South Africans' deteriorating finances in an economy that was already in a recession, with a third of the labour force unemployed, before the first COVID-19 case was confirmed.

The survey shows many have been forced to work more than one job.

If unable to find the extra work, they take loans to buy food, pay school fees, and cover emergency expenses.

READ: Increase in home loan applications in June

The South African Reserve Bank says that in the first quarter, household debt stood at over seventy percent of disposable income.

Consumers were using almost ten percent of their earnings to pay off the debt.

Consumers also took advantage of lockdown payment holidays.

According to Debt Busters, R1.6-million South Africans took them.

This means there is now an additional R20.7-billion in debt that has to be paid off.

Source
eNCA

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