Neil Roets, CEO of Debt Rescue, said the increase comes at a particularly
difficult time for households already battling to afford basic essentials.
“In the face of the expected October petrol and diesel price increases,
driven by renewed global energy market instability and disruptions to oil
supply, which will impact transport, distribution and food prices, worsening
inflationary pressures – the accumulated impact will place already
financially stretched South African households under even greater
pressure,” Roets said.
South African households are already spending over 60% of their income
on unsecured debt repayments, according to Reserve Bank data. The
latest Eighty20 Credit Stress Report reveals that 41.8% of credit-active South
Africans are in default on at least one loan, while outstanding consumer
debt climbed to R2.7 trillion.
Roets warned that higher borrowing costs will also flow through to small
businesses. Small, medium and micro enterprises account for
approximately 34% of South Africa’s GDP and employ 60% of the workforce,
according to the South African Revenue Service.
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