South Africa’s working population is under financial pressure due to a rise in monthly expenses compounded by a weak economy, rising inflation and interest rates.
This is according to a Cape Town-based debt Review Company.
Their research shows that while food inflation and transport costs continue to rise, wages remain flat, forcing consumers to take on a lot more unsecured debt.
Experts say the financial pressure workers suffer is taking a toll on their overall mental wellbeing.
According to DebtBusters, evidence of the financial pressure workers are experiencing can be seen in the increase in the number of debt counselling enquiries. The company’s Debt Index shows that debt counselling enquiries grew by more than 32% in January 2022 compared to January 2021.
Chief Operating Officer at Debt Busters, Benay Sager, says, “Incomes really haven’t changed over the last three years and if you think about the pressures consumers are under … there’s inflation, particularly when it comes to food and electricity; there’s interest rates that have gone up, which generally impacts middle to higher income earners. All of those are putting more pressure on the consumer in terms of their need to borrow, and as a result, they borrow, and as a result their tapping much more into their credit cards, tapping much more into personal loans.”
Data released by Statistics South Africa (StatsSA) shows that the total number of civil judgments recorded for debt increased by 7.4 percent in the three months ended February 2022 compared with the same period in 2021.
The figures further indicate that the total value of civil judgments recorded for debt increased by 13.3 percent in the three months ended February compared to the same time last year.
Rising cost of living for South Africans: