September 27, 2021

South Africans continue to struggle with their finances – citing job losses, salary cuts and reduced work hours

Analysis performed by client credit score reporting company TransUnion exhibits that almost two-thirds of South African shoppers (61%) say their family revenue continues to be negatively impacted by the pandemic.

The information was collected earlier than the third wave of Covid-19 and subsequent civil unrest that rocked the nation in July.

TransUnion’s ongoing Shopper Pulse (previously Monetary Hardship) research exhibits that almost 9 out of 10 (88%) impacted shoppers remained ‘highly concerned’ about their capability to pay their payments and loans.

Credit score obligations had been the highest concern, with casual mashonisa loans (44%), private loans (37%) and retail accounts and bank cards (30%) on the highest threat of going unpaid amongst those that have these payments and loans.

In all, 43% of shoppers surveyed reported being in arrears for a invoice or mortgage previously three months.

“While there have been clear signs of recovery in South Africa’s economy and the overall state of consumer finances, the fact is that many consumers are still under severe financial pressure. It also remains to be seen what effects the third wave lockdowns and recent civil unrest will have on the consumer wallet,” mentioned TransUnion South Africa’s head of monetary companies, Andries Zietsman.

The primary causes for decrease family incomes had been job losses, salary cuts and reduced work hours. 4 in 10 (40%) surveyed shoppers mentioned somebody in their family had misplaced their job, 38% mentioned somebody in their family had their salary reduced, and 28% reported decrease work hours previously month.

Solely 4% of surveyed households mentioned their finances had absolutely recovered after having their family revenue lower sooner or later in the course of the pandemic, with slightly below half (48%) of these impacted reporting that they’d not recovered.

Nonetheless, shoppers remained upbeat: 75% of all surveyed mentioned they had been optimistic concerning the future, with 52% assured their family finances will absolutely get well

To hurry this restoration, 18% had began doing gig work, 17% had began a small enterprise, and 17% had begun promoting items informally.

Alternatives for credit score progress

Shoppers have a transparent urge for food for credit score, with 85% of households contemplating entry to credit score extraordinarily, very or reasonably essential, however solely 27% believed they at present had ample entry to credit score.

A 3rd (33%) deliberate to apply for brand new credit score or refinance present credit score throughout the subsequent yr, with a brand new private mortgage (39%), bank card (33%), and mortgage, dwelling mortgage or bond fee (30%) on the prime of the listing.

Forty-five p.c of surveyed shoppers thought-about making use of for brand new credit score or refinancing present credit score however finally determined not to. Simply over a 3rd (34%) believed their utility could be rejected due to their revenue/employment standing; 30% felt the price of new credit score or refinancing was too excessive; and 26% thought they’d be rejected due to their credit score historical past.

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