Could debt be an underlying aggravation for Xenophobia?

Summary:

• Consumers, burdened by their debt obligations, have resorted in pointing fingers at foreigners.
• An ever-rising number of 10.26 million South African consumers have impaired credit records.

Could debt be an underlying aggravation for Xenophobia?

Aggrieved South Africans are in all forces as they try to drive out productive immigrant workers from ‘their’ townships.

Xenophobia is thriving in Johannesburg, Durban and other areas of the country. It is reported that South Africans claim Zimbabwean and Mozambican immigrants, regardless of whether they are legal or illegal, are taking 'their' jobs and starting new businesses, living on 'their' land and stealing ‘their’ women.

As local residents have attacked foreign immigrants from African countries, the situation has left a number of people dead and many, many more injured, homeless and helpless.

For South African consumers, their financial situation is a constant struggle, as they battle to provide food for the family, pay school fees and keep up with their debt. These consumers, burdened by their debt obligations, have resorted in pointing fingers at foreigners instead of taking ownership for their own financial mistakes.

Latest statistics (based on Q4 2014) released in The National Credit Regulators’ Credit Bureau Monitor, reflects on the never-ending financial burden South African consumers face and the on-going debt crisis in South Africa. Along with the noticeable industry growth in the average South African consumer’s appetite for debt, an ever-rising number of 10.26 million South African consumers have impaired credit records.

Intelligent Debt Management, the overarching business for the leading debt counselling companies DebtBusters and Consumer Debt Help, reflects on the current difficult financial times. Kelli Knutsen, Marketing Manager of DebtBusters states, “DebtBusters’ clients entering into the debt counselling process and earning less than R5k per month are financially crippled, as the average interest rate for unsecured credit agreements is 24%, the highest amount recorded in six years.”

The proof of spiralling hardships is everywhere. Consumers need more money on a monthly basis to pay for their expensive debt.

“The same income group now need over 160% of their net monthly income to service their debt. The broader issues of alleviating debt in the country and encouraging job creation will ensure foreigners are not threatened as South African consumers find themselves better off financially,” Knutsen adds.

Highlights:

• Debtbusters’ clients entering into the debt counselling process and earning less than R5k per month are financially crippled, as the average interest rate for unsecured credit agreements is 24%, the highest amount recorded in six years.
• The same income group now need over 160% of their net monthly income to service their debt