Debt Refuge SA

03/08/2024

R21,700 per month blow to rich South Africans

Wealthy South Africans have the highest levels of debt and are currently spending, on average, R21,700 per month on home loans, vehicle finance, credit, and other forms of debt.

This is according to consumer analytics and research firm Eighty20, which aggregates its data from 42 million adult South Africans representing over R3.7 trillion in earnings per annum.

The wealthiest 5% of the population possesses more assets than any other segment.

Their current debt load is more than three times that of the middle-class workers segment.

According to Eighty20, these individuals are classified as Heavy Hitters.

They have the highest incomes of any segment and, as a result, need to be divided into seven sub-segments with an average monthly income ranging from R30,000 to more than R120,000.

Many affluent individuals bought assets on credit when interest rates were low.

However, with interest rates rising and high inflation, lower to middle-income groups are starting to feel significant financial strain.

According to the firm’s latest data, this group, which includes large families and represents less than 10% of the population, holds two-thirds of vehicle asset finance (VAF) loans and three-quarters of home loans by value.

Eighty20 highlighted that these South Africans, with a take-home pay of about R42,100 after tax, have unsustainable levels of debt in the second quarter of 2024.

The company noted that this group holds around 30% of all home and vehicle asset finance (VAF) loans in South Africa despite representing only 20% of the total loan value.

For a typical affluent individual, debt repayments account for 66% of net income, with two-thirds of their debt secured.

Eighty20 pointed out that households in this group spend R21,700 on home loans and vehicle asset finance.

This also includes unsecured debt, which is debt created without any collateral promised to the creditor.

Many lenders note that this tends to be credit card debt and personal loans used to cover monthly expenses.

Standard Bank advises that if your debt-to-income ratio is higher than 43%, you should consider strategies to reduce your debt.

17/04/2024

18/10/2023

Beware of Debt Counselling Scams!

Make sure your debt counsellor is accredited and reliable.
We are unfortunately living in a world where crime and greed are abundant.

The financial industry is probably one of the most targeted industries out there.

Just like your bank gives you guidelines on how to keep your money safe and secure at all times, we also want you to be save when choosing a trustworthy debt counsellor.

In this article we go through the most important parts of making sure you do not become another statistic, when it comes to some of the debt counselling scams out there.

1. Find an NCR Registered Debt Counsellor.

The first thing you need to be aware of when choosing or speaking to a debt counsellor is:

The Debt Counselling Industry is regulated and controlled by the National Credit Regulator (NCR). Every Debt counsellor needs to be registered with the NCR.

Make sure to ask your debt counsellor for his/her NCR number. You can then check and verify whether they are registered with the NCR by going to the official website. www.ncr.org.za

You can also request a copy of their NCR Certificate. If they don’t supply you with it or you can’t seem to find them on the NCR website. Immediately stop communicating with them and report them to the NCR.

The NCR will then follow through and take appropriate steps to shut them down.

The NCR is tasked with the registration of credit providers, credit bureaux and debt counselors; and enforcement of compliance with the Act.

20/07/2023

Relief for South Africans as Reserve Bank holds rates

The South African Reserve Bank’s (SARB’s) Monetary Policy Committee (MPC) has voted to hold rates.

This keeps the repo rate at 8.25%, with the prime lending rate at 11.75%.

The hold on rates signals a pause in the SARB’s hike cycle that started in November 2021 – but does not mean the end of the cycle.

According to SARB governor Lesetja Kganyago, at the current repurchase rate level, policy is restrictive, consistent with elevated inflation expectations and the inflation outlook.

However, he warned that serious upside risks to the inflation outlook remain.

“In light of these risks, the MPC remains vigilant and decisions will continue to be data dependent and sensitive to the balance of risks to the outlook,” he said.

When asked whether interest rates have peaked, Kganyago said the answer is “a resounding no”.

“Further than this, it depends on what happens to inflation,” he said. “It depends on the data and risks.”

The hold was also a close call. Three members of the MPC preferred to keep rates on hold, and two preferred an increase of 25 basis points.

Kganyago said that, while inflation has come down and markets have found some stability, the long-term economic outlook remains cloudy.

The forecast for global growth is revised marginally higher to 2.5% for 2023 and remains unchanged at 2.7% in 2024.

For South Africa, while conditions appear to have improved, in reality, the situation remains uncertain, particularly with longer-term weather conditions and the impact of El Nina on the agricultural sector.

Despite this, the local GDP forecast is slightly higher at 0.4%, up from 0.3% from the previous meeting, he said. The forecast for 2024 and 2025 remain unchanged at 1.0% and 1.1%, respectively.

19/07/2023

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NCR Registrants must pay their renewal fees annually by no later than 31 July.
Credit Providers - if you haven't received your renewal invoice, please contact the MFSA via email at [email protected]