BusinessTech | South Africa’s middle class is in trouble

South African consumers’ debt situation is getting worse with the average debt-to-income ratio at its highest level ever, data from debt counsellor DebtBusters shows.

The group’s second-quarter enquiries show that debt counselling increased by 18% compared to a year ago.

Benay Sager, head of DebtBusters, attributes this to the after-effects of the nationwide lockdown and a narrowing of consumers’ ability to borrow.

Debt levels have increased substantially and the number of open accounts has decreased for consumers applying for debt counselling, both of which indicate that consumers are seeking help sooner, he said.

The pool of consumer borrowing has also shrunk, as supported by National Credit Regulator data, which indicates that the average unsecured loan size has increased by 46%. The number of loans has decreased by 31% over the last four years.

Read the full article on BusinessTech.

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