The Figures From the 2018 Treasury Breifing About Debt
Last year, the National Treasury & research firm Eighty20 received a briefing and gave comments about the overall debt situation in South Africa (and proposals on dealing with them). They were able to engage with the Sub-Committee on Trade & Industry about possible debt relief measures. Some of the figures related to debt review in particular and those who should be taking advantage of the debt counselling provision in the National Credit Act.
The report to the Treasury said, in part, that people who could qualify for debt review (due to over-indebtedness) have over 16 million loans. Of those loans, 4.7 million loans were 3 months or more in arrears.
Some were in more trouble than others. 1.5 Million people had at least one account that was nine months (or more) in arrears.
Concern For Low Income Earners
At this meeting, the strange comment that Debt Counsellors were not interested in helping consumers who earn under R7500 was made*. This thought seemed to catch the eye of the legislators and has repeatedly been made (though where they get that particular thought is unclear). However, the meeting did touch on low income earners. The roughly 1.6 million consumers who earned only R1500 or less each month (including those receiving grants) had gained access to 2.75 million credit accounts and of those accounts, 35% were 3 months or more behind on payments.
The researchers at the breifing informed Treasury that only 4% of people with Bonds were in arrears on those mortgages.
The figures presented at this meeting helped motivate many of the aims and provisions of the new National Credit Act amendments which, if signed into law by the President, will see a new process called Debt Intervention brought into existence.
Debt Intervention is a form of debt review for consumers with no income or low income done by the NCR via the National Consumer Tribunal.
*Many Debt Counsellors currently happily assist thousands of consumers with little income. Some larger firms target consumers with higher probable debt repayment amounts to try ensure a more profitable client base. This related to the current recommended fee structure issued by the NCR as a guideline. At present, the NCR has encouraged Debt Counsellors not to help consumers without income or who cannot pay anything regularly towards their debts.