World Bank Report

The World Bank Report discusses South Africa

The World Bank wish to end extreme poverty within a generation and boost shared  prosperity. They release reports on the economic situation of various regions on a regular basis and a recent report discusses borrowing in South Africa.

The paper is based on lots of interviews and research they have conducted. Some interesting findings show that South Africans borrow money from friends, family, loan sharks and banks more than anyone else.

The report says that 86% of all South Africans borrow money regularly. That is about 20% more than people in Zimbabwe and Botswana do (who also borrow a lot). The report states that this borrowing is not done merely to cover luxuries but necessities.

One of the interesting figures to come out of the report is that of the borrowing that is done more people borrow from family and loan sharks than they do from the banks and other registered creditors.

We know that more than half of all credit active South Africans are struggling to pay their debts on time with millions of people 3 months or more behind on paying their debts to those creditors who are registered with the NCR. Presumably they are struggling to pay back these other sources of income as well. Many who apply for debt review have run out of family and friends to borrow from at that point.

Though 30% of South Africans dont have a bank account (as the report points out), this is not really an untapped market for those creditors wanting to loan funds as few of these consumers have employment or the ability to qualify for credit with the new affordability assessment requirements. Besides it seems as if they would rather borrow from family and friends.