September 29, 2020
  • September 29, 2020
  • Home
  • Business
  • Survey shows most South Africans depend on debt to survive
S/African president

Survey shows most South Africans depend on debt to survive

By on August 18, 2020 0 118 Views

About 80 percent of South Africans seek expensive unsecured loans to help them meet their monthly financial obligations, according to a survey by fintech platform PayCurve.
Many people are forced to work two jobs if they are able to find any, and they take loans to buy food, cover emergency expenses, such as vehicle repairs, and pay for school-related fees, according to the survey that was completed by 509 South Africans aged 16 to 66.
The findings highlight South Africans’ deteriorating finances in an economy that was already in a recession, with a third of the labor force unemployed, before the first Covid-19 case was confirmed.
Central bank data shows household debt stood at 73.7 percent of disposable income in the first quarter and the cost of servicing these obligations consumed 9.3 percent of households’ income.
These are some of the other findings by PayCurve, which helps companies provide staff with early access to a portion of their salaries:
A total of 11 percent of respondents spent more than half their monthly income paying off short-term debt and 43 percent pay more than a fifth of their salaries toward such loans
Also, 84 percent of respondents who rely on short-term debt wanted the opportunity to access a portion of their income ahead of pay day
DebtBusters, a company that helps consumers restructure their loans, paints an even bleaker picture.
It found that the 1.6 million South Africans who took advantage of payment holidays offered by financial institutions during the country’s coronavirus lockdown from April to June will pay an additional 20.7 billion rand ($1.18 billion) in debt.
“In a country as over-indebted as South Africa, especially at a time when the economy is contracting, this is enough to push people who were just about making ends meet into a situation where their debt-to-income ratio is unsustainable,” Benay Sager, DebtBusters’ chief operating officer, said.

-With Bloomberg

Foreign Exchange

Leave a comment

Your email address will not be published. Required fields are marked *

Sign For NewslettersFor News Updates Around The Globe!