(3 minutes read)
· The latest DebtBusters’ debt index for the second quarter of 2020 released for South Africa, the country is witnessing two main trends regarding consumer debt levels.
· The first trend is such that there is a real-term decline in net incomes
· Secondly, consumers are supplementing this by increased unsecured lending. The decline in growth of net incomes, consumers are forced to borrow heavily, especially using unsecured loans to meet the resource gap
According to the latest DebtBusters’ debt index for the second quarter of 2020 released for South Africa, the country is itnessing two main trends regarding consumer debt levels. The first trend is such that there is a real-term decline in net incomes. Secondly, consumers are supplementing this by increased unsecured lending. The decline in growth of net incomes, consumers are forced to borrow heavily, especially using unsecured loans to meet the resource gap.
The widening resource gap is found mainly in higher-income earners in South Africa, according to the debt index. On average, unsecured debt was 18% higher than it was four years ago. For instance, consumers with income more than R10, 000 per month, the unsecured debt is 31% higher.
For those earning R2,0 000 or more per month, unsecured debt levels are 42% higher than 2016 levels. For those earning R20, 000 or more a month had an unsustainable debt-to-income ratio of 138%. This is 12% more than during the same period in 2016. DebtBusters has been tracking client trends over the past four years.
