Many South Africans are now facing a perfect storm of rising interest rates, growing inflation and 25% less take-home pay than they had in 2016.
This grim picture was painted on Tuesday by Benay Sager, head of the country’s largest debt counsellor, DebtBusters, in a media briefing to share an analysis of the firm’s debt counselling enquiries during the last quarter of 2021.
Though nominal income is only slightly lower than in 2016, when cumulative inflation of 24% over the six-year period is factored in, Sager said, real income has shrunk by 25%. This while the average loan size has increased by 45%. Consequently, consumers continue to supplement their earnings with unsecured credit — personal loans, store credit, credit cards, overdrafts and the like.
