credit numbers in south africa

Credit numbers in South Africa – what you need to know?

Some interesting credit numbers emerged from the recent National Debt Counsellors Conference at Emperors Palace recently. 

The world and South Africa’s economy are looking a bit bleak. As they say: “When America sneezes the rest of the world catches a cold”. The American economy is not looking great, so it’s a worry for the rest of the world.

Last year, household debt was going down, but this year it is increasing again. This is not a good sign.

READ MORE: World population, debt and retirement savings – what you need to know

Here are some interesting credit numbers in South Africa:

42% of the credit in the whole country is granted in Gauteng.  This is a big number especially when you consider we have 11 provinces.  Gauteng is the smallest province by size, and yet almost half of South Africa’s credit is granted in Gauteng.

To compare the other provinces

  • KZN is 14%
  • And the Eastern Cape is 6%
  • In the Western Cape, it’s 17%

This shows that Gauteng really is the financial powerhouse of SA when it comes to debt.

Another fascinating credit number:

Short term loans (month end loans and short 3 month loans) in South Africa are the worst paid.

There are about R1 Billion worth of short term loans, and 30% of those are in arrears. On the other side of the financial scale, there is R80 Billion outstanding on home loans, and only 8.5% of people are in arrears.

Some of the arrears might just be a short payment in one month which can easily be fixed.

30% arrears are on short term loans, and 8.5% on home loans. This is a lot of money outstanding but 30% is unacceptable because one in three short term loans is not being paid correctly.

What does the debt situation look like in South Africa?  

The South African population is about 60 million, give or take a few million.

There are 25 million people who use credit in SA. This is a bit less than half the population (considering that there are a lot of children counted in the 60 million number).

Out of the 25 million people in SA who use credit, how many do you think have a bad credit record? This can be anything from one short payment to judgements. In other words how many people are not up to date with everything?

The short answer? About 10 million.

So 10 million out of 25 million have a bad credit record. That’s 40%! Two out of five people have problems with credit and if they had to walk into a bank and ask for credit, they would be refused.

ALSO READ: What is good debt and what is bad debt?

We always urge people to look at that credit record and get a free credit report, so that they don’t get a surprise when they apply for car finance or a loan and are turned down.

Why do we not have 100% good debt payers in South Africa? Can debt counselling fix this number?

It would be very nice to have 100% good debt payers in SA, but that hasn’t been achieved anywhere around the world.

A lot of the 10 million people have minor things wrong with their accounts (an old account that wasn’t settled or a dispute on a clothing account item returned, etc.). On the other end of the scale, quite a few are already being sequestrated or are in administration, but debt counselling has already helped many thousands of people to have a good record again.

But the numbers tell us that there are still many people out there who need help.

At RD debt Counselling we have a division for new entrants to debt counselling, and, a division where we do credit clearances, debt review clearance and take over and fix old debt review.

For any debt help and assistance, contact RD Debt Counselling today.