Problems and Solutions to the Indebtedness of South Africans

    July 1, 2018

    With tough economic times, many South Africans are struggling to keep their heads above water. The fairly newly launched Experian Consumer Default Index tells us that these same people are defaulting on their accounts. Here we will look at problems and solutions to the indebtedness of South Africans.

    1. Lots of tempting attractions to eat away at your money
    2. Banks are making it difficult for people to receive credit which is good
    3. Informal money lenders are increasing and providing people with credit
    4. High unemployment rate and loss of jobs put people into more debt
    5. Debt experts tell us that South African show impulsive buying behaviour – they can’t say no – not if their friends have it

    Many Tantalizing Temptations

    There are many reasons why people are in debt and it seems that all the hype around online casinos, Lotto, Powerball and cryptocurrency is making many people gamble away their money.

    Experian is a leading global information services company. They –

    • help their clients manage credit risk
    • help clients check their credit report and credit score
    • provide data and analytical tools to clients and help businesses manage credit risks
    • you can check your credit report regularly to ensure it reflects your credit track record accurately.

     

    Experian tells us that in the period May to July 2017, 3.57% of consumers’ credit balances were in default. This information is according to Experian’s Consumer Default Index (CDI), which was recently launched in October.

    Curtailed Credit Brings about Improvements – Problems and Solutions to The Indebtedness of South Africans

    According to chief data officer at Experian, the composite index reading is an excellent means to keep track of South Africa’s spending and to see how limiting credit for those who can’t afford it is bringing about improvements. These Problems and Solutions to The Indebtedness of South Africansimprovements are because of the slowdown in credit extension to South African households.

    In fact, credit extensions have been less since 2012, and this is because of stricter regulations with regards to granting credit to those who can’t afford it. This report from Experian is going to be published on a monthly basis.

    Experian offers a breakdown of South Africa’s debt and how they are dealing with interest rate changes, price increases and unemployment. They categorise the South African population into areas and segments –

    • The ‘Hard Working Money’ segment – people between 35 and 49 years of age, had the biggest loan debt for vehicles. This segment had a CDI of 2.56% for December 2017 compared 2016s figure of 2.26%.
    • The ‘Single Room Landlords’ – young, employed people’s CDI was 5.54%, worse than the CDI of 3.7% recorded in 2016.
    • With the home loans and credit cards segment, there were improvements across home loans and credit cards, while Minimum Wage Rural Families living in the rural areas of the Northern Cape and the Free State, recorded the worst deterioration.

     

    So credit providers have a serious task to establish a borrower’s ability to repay a loan. Also, these days you can’t get credit willy-nilly and if you want credit badly. Experian knows that consumers can take advantage of the free service provided each year by the credit bureaus to access your credit report.

    Check your Credit Record as Often as You Want – Problems and Solutions to The Indebtedness of South Africans

    So you should look over your credit report often to ensure it is up to date. Phone Experian on 0861 10 56 65 because the best thing about their CreditExpert is that you can check your credit report online as often as you want.

    Also, as you try to get rid of debt, try and act responsibly yourself, and if you are offered credit, turn it down if you’re already battling to pay your current debt. Worst performing

     

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    All info was correct at time of publishing