The statistics of debt in South Africa paint a shocking picture and clearly show the importance of debt counselling in SA and education with regards to consumer rights and credit. Once consumers better understand the debt statistics in South Africa, and how debt counselling in SA can help them to overcome their financial worries, there is hope for an alleviation of the credit situation in South Africa.
According to statistics, over 8 million South Africans are over-indebted, meaning that 8 million households are currently struggling to pay debts on a monthly basis and are in need of credit counselling. These statistics have not stopped South Africans from taking on more credit, as the recent Consumer Credit Market report shows a 22.91% increase in new credit approvals and the result is that more than 70% of an average household income is spent on repaying debts, thereby drastically lowering living standards as disposable incomes becomes less and prices climb.
Debt counselling in SA is an incredibly effective and safe way to minimise a debt crisis. Over 7 000 applications for debt review are processed monthly, and since its inception, debt counselling in SA has resulted in nearly 300 000 applications for debt counselling since March 2008. Although it seems a high number, in comparison to the number of individuals that are over-indebted, debt counselling is still not valued as highly as it should be.
Although the number of applications are increasing, only about 66 000 applicants are currently making their payment through a payment distribution agency. These statistics point to an alarmingly high amount of people in need of debt counselling in SA who are either not aware of its benefits or wary of the process. It is important to know that debt counselling in SA could save assets, free up disposable income and help to alleviate the credit situation in South Africa.