Job Cuts will increase Credit non-payments
An increase in outstanding customer debts has resulted in a step up by companies and creditors....
The Christmas period brought something other than fun and well being to South Africans; it also saw a step up by stores and companies trying to recover their outstanding customer debts while lenders cut down their client base.
A recent report by Fin24 commented that december saw the number of people labelled by creditors as slow paying, defaulted or written off increase to 13.8% from the 12.2% of the countries credit users three months earlier. The total number of people with impaired credit records went up from 2.14 Million to 2.42 million so far from 2008 to 2009.
This figure was based on data from a registered credit bureau, and recent figures from government show that a continued deterioration is expected this year.
As the SA economy has so far suffered little fallout from the global economic slump, and the reserve bank has ensures that steady interest rate cuts allow the consumers some breathing space, according to Fin24.com the impact to the SA economy is still to come.
Gabriel Davel, CEO of the National Credit Regulator, said recently that the numbers are getting worse, with the number of consumers falling off a cliff increasing steadily. Davel continued to point out that the external environment, yet to be greatly affected, is likely to be hit with a shock in the upcoming months.
Economists are saying that the labour market needs to pick up before there can be any sign of recovery for consumer borrowing. A recent report by Fin24, looking into the current economic conditions, featured a few economists with the following opinions;
Elna Moolman, group economist at Barnard Jacobs Mellet in Johannesburg said; "Typical households' debt repayment are more sensitive to employment than most other economic factors. We would therefore need clarity on the job market before any material recovery should be expected in consumer demand and the performance of their loans."
Davel stated; "Surging demand for credit has calmed down and was possibly caused by a need for pre-school, New Year finance. We cannot see any sign statistically that there are a great number of new entries into credit. However, we can see a great number of people approaching debt counsellors."
With an average of about 6000 new people go into debt counselling per month it's no wonder the credit crisis is showing signs within the South African economy. If you need to apply for debt counselling, debt management of for a personal loan, here atJustmoney.co.za we are able to ensure you get the best available to you. An increase in job cuts will undoubtedly increase the number of credit non-payments, however by consolidating your debts and organising counselling you will be able to ensure you keep your credit record intact. Don't hesitate to apply for help if you need it.
We will keep you informed here at Justmoney.co.za