PRETORIA – South Africans seem to be drowning in debt and not saving as much as they should.
Recent reports show that South Africans are taking out more and more loans.
South Africans continue to spend money and get themselves further into debt.
Despite a high unemployment rate and low incomes, consumers still have a strong appetite for credit.
The recent festivities show South Africans would rather opt to spend their bonuses, then save or service their debt.
“The reality is that there are more loans than jobs in South Africa. Unemployment in South Africa is currently sitting at more than 25%. Now if you look at the over-indebtedness of South Africans it amounts to almost more than half of active credit consumers and that meaning more active creative consumers are in arrears,” said Neil Roets from Debt Rescue.
The National Credit Regulator says South Africans are big borrowers, and saving isn’t top of their list.
“For the quarter ended September 2017, there has been an increased appetite for credit on the part of consumers. We did see an increase in the number of consumers applying for credit. There are an approximately 9.8 million consumers that applied for credit,” said National Credit Regulator, Ngoako Mabena.
Financial experts say financial literacy plays a big role in why many don’t save and spend money they don’t have.
The regulator has urged South Africans to not live beyond their means and only turn to credit in emergencies.