“Unsecured lending” by definition includes loans for which the lender holds no security by pledge or personal security. The National Credit Regulator has reported growth in unsecured lending from R40bn in 2008 to R172bn in 2014. The vast amount of money lent combined with the ramifications of reckless lending sees many South Africans burdened with over-indebtedness.
30 March 2017
As the country is faced with a lot of uncertainty – from the social grant beneficiaries to fresh speculations of the president reshuffling the cabinet – South Africans are left on the fence wondering what the future holds. Today, Mr. Kganyago, the Governor of the South African Reserve Bank, and the Monetary Policy Committee (MPC) were faced with a tough decision to determine the repo rate. This remains unchanged at 7%.
The recent Rand (ZAR) trend of fluctuating with the major currencies has left investors with very little confidence in the South African economy. A drop in investors could result in major industries retrenching or closing operations.
The economy is still not showing any significant growth and the number of South Africans facing financial difficulties is increasing. This leaves consumers with no choice but to turn to pay day loans or unscrupulous lenders to meet their everyday needs. Ian Wason, CEO of DebtBusters, stresses the importance of financial education for most South Africans to avoid being caught in the debt trap.
“Being in debt can seem overwhelming, but with good advice and expert assistance it is possible to get out of it. No matter how far gone the situation seems it’s critical to take that first step and ask for help”, ends Wason.
On the flip side, the recent rainfall in the northern parts of the country has since ended the drought in these areas (although the Western Cape is still very much in need of good rainfall), we have produced a bumper maize crop this year that will contribute toward much needed improvements to our GDP, and we have seen a drop in fuel prices. These factors will have a positive impact on the consumers’ budget.