JOHANNESBURG – As South African consumers face price hikes in electricity, fuel and groceries, there are warnings that people are increasingly borrowing money to make ends meet.
A new report by the World Bank suggests South Africans are the biggest borrowers in the world.
The Global Findex database report shows 86 percent of South Africans took out a loan in 2014 while the worldwide norm is 40 percent.
The database report shows South Africans are more inclined to borrow from friends and family than micro-lenders and financial institutions.
The only countries which came near South Africa in the borrowing stakes were Zimbabwe at 62 percent, Kenya at 79 percent, Botswana at 69 percent, Niger at 71 percent and Iran 80 percent.
Chief Executive Officer of Debt Rescue Neil Roets says people need to be educated on managing their finances.
“The solution is we need financial education, we feel that government can definitely step in for instance, because you cannot borrow your way out of debt.”
Roets says South Africans are struggling.
“Almost half of all credit consumers are over indebted so it’s definitely a problem and it just getting worse.”
He says people should be informed of their rights and if they are over indebted they should see a debt counsellor.
Roets added that there were three types of debt people in the country.
“One to maintain a certain basic lifestyle, one to live a life of luxury, and the other for the purposes of pure survival.”