This is evident from the latest financial results seasons for banks and PwC’s annual report on the South African banking sector, which shows that, for the year ending in December 2019, the combined credit loss ratio of the banks climbed by 14 basis points to 80 basis points.Costa Natsas, head of financial services at PwC Africa, said the current ratio meant that banks expected an average credit loss of 80c for every R100 worth of loans or advances.
Earlier this week, FNB announced that impairments for the six months to the end of December increased by R910 million. If capital is included, about 20% of the average consumer’s disposable income is spent on debt repayments.The latest figures from the National Credit Regulator show that the number of consumers with credit records who had had outstanding account payments for three or more months by the end of September was 5.6% more on an annual basis.
Neil Roets, CEO of the debt counselling company Debt Rescue, said they were preparing for one of the busiest years in the history of the business because so many people were in financial trouble. Kind said that debt left consumers financially vulnerable and exposed. Many continue to incur debt to buy luxury goods they cannot afford, while others end up buying necessities on credit.
And is going to get much, much worse..
And what is the solution