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Debt Index

Q1 2024 Debt Index

8 May 2024

According to the latest Q1 2024 Debt Index – Persistently high interest rates and inflation – especially food inflation - continue to erode consumers’ disposable income, while a lack of any meaningful economic growth is constraining salaries.

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Download the full Q1 2024 Debt Index here. 

Based on the results from the report, DebtBusters said this to the public:

More consumers seek help to counter high inflation, interest rates, stagnant income

  • Demand for debt counselling increases by 22%
  • Subscriptions for online debt-management services up by 30%


Persistently high interest rates and inflation – especially food inflation - continue to erode consumers’ disposable income, while a lack of any meaningful economic growth is constraining salaries.

Despite this, debt-to-annual-income ratio has remained stable for the past three quarters at 107%. While lower than 2023 levels, this is still high.

These are some of the findings from DebtBusters’ Q1 2024 Debt Index. The quarterly analysis of data from debt-counselling applicants also found that demand for debt management increased, with debt-counselling enquiries rising by 22% and the use of online debt management services up by 30% compared to the same period last year.

Benay Sager, executive head of DebtBusters, says although the improvement in overall debt levels combined with consistent monthly debt repayment trends are positive, the impact of increased interest rates on asset-linked debt is particularly evident in the 40+ age category.

The average interest rate for a bond has increased from 8.3% per annum in Q4 2020 to 12.3% in Q1 2024. For a R1.5million bond this adds an extra R4 000 per month to the repayment amount.

“What also continues to be apparent is how higher-income earners are using credit to offset the dual impact of inflation and interest rates - now 475 basis points higher than in 2020. These consumers typically have more short-term loans than those in other income bands and devote a greater proportion of their income to repaying debt.”

Compared to the same period in 2016, when DebtBusters first began analysing the data, the Q1 2024 Debt Index found:

  • Purchasing power has diminished by 47%. Nominal incomes are 1% lower than in 2016 while the cumulative impact of inflation over the eight years is 48%. While some income groups saw real increase in incomes, on average the trend was slightly downwards.


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  • The debt-service burden is high, with the average debt-counselling applicant using 62% of net income to repay debt. The situation is worse amongst higher income earners. The debt-to-income ratio for people taking home more than R20 000 per month is 127%, while it is 172% for those earning R35 000 or more. These ratios are at or close to the highest ever.


  • Top earners have unsustainably high levels of unsecured debt. While average unsecured debt levels are up 14% compared to 2016, this is lower than recent quarters and is a welcome trend. What is concerning is that for people earning R35 000 and more, unsecured debt levels are 41% higher. This is in line with inflation and indicates that without meaningful salary increases these consumers are using debt to supplement their income. The average interest rate for unsecured debt is now at an eight-year high of 25.7% per annum.


Sager says that the growth in debt counselling enquiries and use of online debt management tools is positive as it indicates more consumers are trying to become financially sustainable.

Last year the free subscriber base for online debt management tools on grew by 82% compared to 2022. These include Debt Radar, which assists subscribers to manage their debt. A new tool, the Debt Sustainability Indicator shows subscribers the percentage of their income required for debt repayments and how to make the ratio more sustainable.

For those consumers who successfully apply for debt counselling, unsecured interest rates can be reduced by over 90%, from an average of 25.7% to ~2.6% per annum. This allows expensive debt to be paid back faster.

Vehicle debt and balloon payments can be serviced over a meaningful period, with the average financed vehicle interest rate of 15.4% per annum negotiated down to a more manageable level.

Sager says the number of people successfully completing debt counselling has increased tenfold since 2016. Those who obtained clearance certificates during the first quarter of 2024 paid back over R600 million worth of debt to creditors while they were in debt counselling.



Benay Sager

Executive Head of DebtBusters

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