Shrinking incomes, uncertainty about the future and the economy and high levels of debt make it unsurprising that South African consumers feel stressed and overwhelmed.
According to DebtBusters’ Benay Sager, head of the country’s largest debt counsellor, real income has shrunk across all income bands, in some cases by 20% compared to 2016 levels. To make up the shortfall consumers are increasingly relying on unsecured debt.
“Although payment holidays provided some relief during the lockdown, when payments recommenced even consumers who had just been making ends meet found themselves struggling. Unfortunately, being financially burdened has now become the norm for many people.”
He says the combination of this, uncertainty about the situation the country is in and their own future contributes to people feeling overwhelmed.
“The risk of this is that rather than address the problem, people go into a state of denial and do nothing or become paralysed by anxiety. This isn’t helped by the fact that South Africa is a society where many people avoid talking about debt for fear of being stigmatised.
“It’s why this February for National Debt Awareness Month our theme is: Get help if you’re not coping with debt -it’s the responsible thing to do.”
He says that South Africa’s debt counselling sector is world-class and well-positioned to provide support for people feeling vulnerable because of debt and not wanting to talk about their problems or stress their loved ones.
“When you call a reputable debt counsellor registered with the National Credit Regulator, you’ll be dealing with a financial specialist. The first thing they’ll do is an assessment to see whether debt counselling is something that could help. This happens in a safe space with an expert who considers the situation empathetically but objectively.”
Alternatively, consumers who prefer to do a self-assessment can use online tools such as the one found here https://www.debtbusters-client.co.za/register
Reputable debt counsellors will support consumers for whom debt counselling is an option and who decide to go ahead with the process. They will intercede with creditor and provide help and advice throughout the process.
Importantly they will also negotiate monthly debt repayment reductions, especially on unsecured debt such as personal loans and credit cards. This provides substantial savings on the outstanding debts.
“If you’re feeling out of control or think you might be in financial trouble it’s always best to seek assistance sooner rather than later. The feedback we get from many consumers is that they wished they’d sought help earlier because doing so made them feel in control of their lives and finances,” says Sager.