South African consumers are heavily over-indebted and likely to become more so, given that we are at the bottom of a rising interest rate cycle and salaries don’t appear to be keeping pace with inflation.
Over the past six years, the average loan size in South Africa has increased by 45% although the number of debt obligations fell 19%, showing that consumers are taking on more debt per credit agreement. Speaking at the launch of the Debt Index for the fourth quarter of 2021, Benay Sager, head of DebtBusters, said that with no increase in real income levels since 2016, Saffers are increasingly supplementing their earnings with unsecured credit.
