South Africans Owe As Much As 28 Times Their Monthly Salary

Some South Africans owe as much as 28 times their monthly salary, according to a new Consumer Report from National Debt Advisors (NDA).

The report covers more than 70,000 people under debt review. The average person owes R91,126 while earning just R9,536 a month.

NDA head Sebastien Alexanderson said the numbers tell a hard truth.

“South Africans are not living beyond their means anymore. Their means are simply not enough to live on. Debt has become the way people are closing that gap,” he said.

Interest rates are not helping. The repo rate sits at around 6.5% and prime close to 10%, keeping borrowing expensive. A weak rand is also pushing up the cost of living.

With economic growth at around 1% and unemployment close to 32%, Alexanderson said incomes are not keeping up.

Almost all the debt NDA sees is unsecured, mostly personal loans, credit cards and store accounts. Among lower-income earners, 96% of debt falls into these categories. Just 1.4% hold a home loan and fewer than 5% have vehicle finance.

“There is no asset to fall back on, and when interest rates stay high, repayments can quickly become unmanageable,” Alexanderson said.

More than half of those seeking help from NDA are between 31 and 45 years old. Over-indebtedness tops 50% in lower-income groups and stays above 40% even among higher earners.

Alexanderson said the problem is not about bad choices.

“This is a structural gap between income and the real cost of living. Credit is filling the gap, but it is not solving the problem. That gap is not closing. It is getting bigger,” he said.

By  Scrolla.