South Africans are drowning in debt but still clamouring for credit
The growth is not in secured credit… Only R40 billion was mortgages… We are now in a debt spiral… If 55% of credit applications are turned down, where do they go? They go to loan sharks…Maya Fischer-French, personal finance journalist - Maya on Money
Unsecured credit is growing at around 11% or 12%...Siphamandla Mkhwanazi, economist - FNB
South African consumers are drowning in debt worth R1.9 trillion.
Of that about R200 billion is unsecured, short-term debt (e.g. credit card debt, store accounts, personal loans, etc.)
Credit providers turned down six million credit applications (55% of total applications) in the second quarter of 2019.
Listen to the interview in the audio below (and scroll down for more quotes from it).
We’ve seen aggressive lending, especially around furniture and household stuff. Those are not needs, those are wants…Maya Fischer-French, personal finance journalist - Maya on Money
Salaries are not keeping up with real inflation, let’s be honest. Our inflation rate is not 5%... combined with massive retrenchment – we’re in a spiral!Maya Fischer-French, personal finance journalist - Maya on Money
Often the police are involved [in loan sharking] ... [people tell her] ‘I can’t go to the police station, they are involved’… There’s definitely an organised crime element to it…Maya Fischer-French, personal finance journalist - Maya on Money
… most of that [credit growth] is unsecured, which we understand to be consumption-driven credit. However, we aren’t seeing much of that translated into actual consumption. What are consumers doing with the credit if it’s not coming through in sales?Siphamandla Mkhwanazi, economist - FNB
Enjoy The Money Show, but miss it sometimes?
Get the best bits emailed to you daily, right after it ends:
This article first appeared on 702 : South Africans are drowning in debt but still clamouring for credit
Andy Rice shares his choice of advertisements that were heroes and zeros this week.Read More
Shoprite is now using plastic returned to its distribution centres to produce 100% recycled and recyclable plastic shopping bags.Read More
A field sales technology provider based in Stellenbosch has secured an investment worth R435-million from an American investor.Read More
Deep Fakes and bigwigs: Bruce Whitfield interviews several captains of industry at Davos 2020.Read More
Dodgy tenants who don’t pay – a perennial headache for landlords. Kieno Kammies interviews credit bureau TPN’s Michelle Dickens.Read More
Despite the huge expense, few medical aids cover members in full when they're hospitalised, leaving them with massive shortfalls.Read More
SAA has released the lists of flights affected by a "consolidation process" which has led to an amended flight schedule.Read More
A trove of 715 000 files prove that Isabel dos Santos syphoned a breathtaking fortune into offshore accounts, says the ICIJ.Read More
If Jeff Bezos and Bernard Arnault – the world’s two richest men – sat on their wealth piled up in $100 bills, they’d be in space!Read More