South Africa’s middle class is drowning in debt and getting poorer and poorer
“Things aren’t looking good for our country. The forecast for economic growth is still below 1% and consumers are literally borrowing more just to survive,” says Clement Manyathela
South Africa’s middle class is increasingly funding their lifestyles by way of unsecured debt such as loans and credit cards, according to debt counselling group Debt Rescue.
Price increases and increased debt are pushing people from the middle class back into poverty… They’re paying a lot of taxes but they’re not getting a lot of tax breaks. They’re earning more than lower-income people but not enough to cover all these price increases…
Clement Manyathela interviewed Neil Roets, CEO at Debt Rescue.
“People earning more than R15 000 per month… these people finance their goods… the vehicles they finance, their houses… they’re feeling the pinch of the sluggish economy. Prices are going up… Employees don’t get the increases and bonuses they’ve become used to,” says Neil Roets, CEO of Debt Rescue.
Neil continues: “It’s very difficult to get yourself out of debt. In South Africa, we are very, very lucky to have the best legislation with regards to helping overindebted people. It’s called the National Credit Act. It makes debt counselling available, a process by which you pay off your debt in lower instalments over a longer period, so you have enough left to pay for your living expenses… It protects consumers against credit providers who want to take legal action.”
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