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South Africa’s prominent debt management company, DebtBusters, reports a 41% spike in consumers seeking debt counseling.
Economic challenges, including soaring living costs, have left many individuals grappling to meet financial obligations. The rise in payday loans indicates a growing trend as consumers seek additional income sources to supplement their salaries.
Factors such as high-interest rates, inflation outpacing salary increments, and the inability to fulfill monthly debt commitments have driven consumers to delve deeper into financial strains.
Head of DebtBusters Benay Sager says, “We have seen a significant increase this year compared to last year. It’s 41% higher in terms of enquiries that we receive and I think that is driven by a few things, I think that last year it was a very difficult financial year for South Africans…”
At least in the last 15 years and inflation, particularly inflation on food, electricity and petrol on top of that the increase the fact that load shedding really impacted a lot of small businesses and because there hasn’t been any growth in terms of jobs,” says Sager.
Research by DebtRescue indicates that despite some consumers planning budgets for the festive season, overspending during the holidays, combined with expenses related to school fees and uniforms, contribute to the challenges faced by many.
DebtRescue Annaline Van der Poel says, “Many people are sitting with arrears of struggling. Already before the festive season started a lot of times they were hoping that they will get the bonuses that will maybe amplify the pressure. many people weren’t… beginning of the year and consumers are facing tough times.”
Banking sector research underscores that around 60 percent of consumers deplete their funds within just five days of receiving their paychecks. The reliance on credit to cover essential expenses, such as putting food on the table, further highlights the economic strains faced by many.
Increase in consumers seeking debt counselling: Benay Sager, DebtBusters:
Story by: Matimu Khosa
Source: SABC News (sabcnews.com)