(3 minutes read)
· The possibility of significant surge in bad debts can be evidenced in South Africa as more and more people are losing income, partly due to lockdown and the impact of severe credit squeeze, which the country has inherited since the financial meltdown.
· Transaction Capital Risk Services (TCRS), sister company to minibus taxi financier SA Taxi predicted that more consumers will default on their debt, despite relief measures like record-low interest rates and bank repayment holidays that ended in June.
The possibility of significant surge in bad debts can be evidenced in South Africa as more and more people are losing income, partly due to lockdown and the impact of severe credit squeeze, which the country has inherited since the financial meltdown.
Transaction Capital Risk Services (TCRS), sister company to minibus taxi financier SA Taxi predicted that more consumers will default on their debt, despite relief measures like record-low interest rates and bank repayment holidays that ended in June.
TCRS, which specializes in debt collection, buys books that have been written off or are close to being written off by credit providers. It has published its Consumer Credit Rehabilitation Index (CCRI) for the second quarter of 2020.
The index showed that South African consumers’ propensity to repay their debt deteriorated by 2.6% compared to the second quarter of 2019, and by 2.5% when compared to the first three months of 2020. A fall in propensity to repay debts signifies that more people are likely to have defaulted on some or all their debts or will soon do so.
