Debt Busters: 40% rise in debt counselling over past year
Debt Busters COO Benay Sager says the series of repo rate hikes have seen consumers sinking deeper into debt
Sager says South Africans’ salaries are not keeping up with inflation and the rising cost of living.
Debt Busters released its latest Debt Index tracking consumer financial trends on Thursday.
“Our debt index indicates that consumer incomes have not moved at all over the last several years, they have remained flat, and the impact of inflation has been very severe with about 40% of price increases. As a result, consumers are having to tap into unsecured debt to make up for the shortfall in their income growth,” says Sager.
He says more people are seeking debt counselling compared to previous years.
“Faced with rising interest rates and high inflation, the latest Q1 2023 Debt Index from Debt Busters indicates that many more South Africans are seeking help to manage their growing debt burden, with demand for debt counselling growing by 40% compared to the same period in 2022”.
“Compared to Q1 2016, consumers who applied for debt counselling in the first quarter of 2023 had 38% less purchasing power, as well as unsustainably high levels of unsecured debt and a higher debt-service burden – with 65% of net income being used on average to service debt.”
ALSO READ:
