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Consumers drowning in debt

5 Dec 2013

South Africans are drowning in debt and need to be cautious about their spending over the festive season, the National Credit Regulator (NCR) said on Wednesday, 4 December 2013.

Credit bureau statistics for the quarter ended September showed an increase in consumer debt, NCR CEO Nomsa Motshegare said in a statement.

Credit bureaus had over 20.2 million credit-active consumers on their books, up 0.4% of them from the previous quarter.

"The number of consumers with impaired records increased by 71,000 to 9.7m, from 9.69m in the previous quarter," Motshegare said.

This group accounted for just over 48% of credit-active consumers.

Consumers in good standing increased by 9000, to 10.5m, representing 51.9% of credit-active consumers.

Compared with the quarter ended June, this reflected a decrease of 0.1%, or 1.1% year-on-year.

Over 357 million inquiries on consumer credit records were made, a decrease of 0.7% from the previous quarter, but an increase of 11.5% from the same period last year.

Of these, just over 85% were by banks and financial institutions, 4.6% by telecommunication providers, 4.5% by consumers, and 3.2% by retailers.

Motshegare said consumers should monitor their budgets during the festive season and avoid recklessly spending their year-end bonuses.

Source: Sapa

Source: I-Net Bridge

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