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Debt Index

Q4 2023 Debt Index

7 February 2024

According to the latest Q4 2023 Debt Index – released coincide with National Debt Awareness Month (February) – last year was among the most financially difficult that South African consumers have endured since democracy, with high inflation and interest rates and a straitened economy combining to erode disposable incomes.

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Download the full Q4 2023 Debt Index here.

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

SA consumers endured most financially challenging year in 2023

-       Combination of high interest rates, inflation and poor growth impacted disposable incomes

-       Despite pressures positive signs that more consumers are addressing  burdensome credit

-       This year’s National Debt Awareness Month theme is financial sustainability

Last year was amongst the most financially difficult South African consumers have endured since democracy, with high inflation and interest rates and a straitened economy combining to erode disposable incomes.

Rising food, electricity and fuel prices drove inflation, with the Reserve Bank countering by increasing and sustaining interest rates which are now 475 basis points higher than in 2020. Crippling levels of loadshedding constrained meaningful economic growth and consequently salary increases.

The average interest rate for a bond grew from 8.3% per annum in Q4 2020 to 12.3% by Q4 2023. Average interest rates for unsecured debt are now at an eight-year high of 25,6%.

Against this backdrop DebtBusters’ Q4 2023 Debt Index found that debt counselling enquiries increased by 46% and demand for online debt management was up 54% compared to the same period the previous year. Full-year debt counselling enquiries grew by 39% compared to 2022, pointing to an acceleration in the final quarter of 2023.

The release of the data coincided with National Debt Awareness Month, in February. The theme this year is financial sustainability to acknowledge the pro-active steps so many South Africans have taken to put themselves on a better financial path.

Benay Sager, executive head of DebtBusters, says that while the combination of high inflation, interest rates and poor economic performance had negatively impacted disposable income, the fact that more people are seeking help to manage debt is positive.

“The increasing use of online debt-management tools indicates consumers are being more pro-active about debt - before it gets out of control. The data also points to more people considering debt counselling as an effective way to deal with debt in a high-interest environment”.

Under debt counselling rates for unsecured debt can be renegotiated from 25,6% to ~2,6%. This allows consumers to pay back expensive debt quicker. Interest on vehicle-debt and balloon payments, which average 15.6%, can also be negotiated down and the period extended.

The Debt Index also found that Q4 was the second quarter in a row that the median debt-to-annual-income ratio had declined, although at 106% it is still high. This indicates that consumers are still experiencing the effects of the interest rate increases that began in November 2021 and remain elevated.

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“Virtually everyone, 95%, of those who applied for debt counselling during the quarter had a personal loan and 24% a short-term loan. This indicates that consumers are supplementing their income with short-term loans and personal loans have become a lifeline for many,” says Sager.

Compared to 2016, when DebtBusters began collecting and analysing the data, consumers who applied for debt counselling in Q4 2023 had:

  • Thirty nine percent less purchasing power. Although nominal incomes were 1% higher than seven years ago, when cumulative inflation of 40% is considered, in real terms spending power is down 39%.
  • A higher debt-service burden: On average, before entering debt counselling, consumers spend 62% of their take-home pay to service debt. Those making R35 000 or more per month use 71% of their income to repay debts. The debt-to-income ratio for the top income bands is 131% for those earning R20 000 per month and 171% for people taking home R35 000 or more. For these income bands the ratios are at or close to the highest-ever levels.
  • Unsustainably high levels of unsecured debt: Unsecured debt is, on average, 32% higher than in 2016. For those taking home more than R35 000 a month it is 42% higher. Although this is par with inflation, it shows that in the absence of meaningful salary increases, consumers are supplementing their income with unsecured debt.

Sager says that the subscriber base for free online debt-management tools increased by 82% in 2023 compared the previous year. Given this interest in pro-actively managing debt DebtBusters has added a Debt Sustainability Indicator to the tools it offers. This calculates the proportion of income being used to repay debt and offers practical tips on how to make it more sustainable.

“We’re focussing on financial sustainability this National Debt Awareness Month, to encourage more people to deal with their credit situation before it becomes a debt problem.”

 Notes to editors

DebtBusters’ quarterly Debt Index is compiled from data provided by clients who have applied for debt counselling.

DebtBusters is South Africa’s leading and largest debt management company. It holds the 2023 Debt Review industry award for the best debt counselling company, the eighth time it has won in a decade.

Throughout National Debt Awareness Month this February, DebtBusters will be providing consumers with information about managing their credit profiles and debt. Consumers can register for free self-help tools here:


Benay Sager

Executive Head of DebtBusters


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