The cost-of-living crisis means that South Africans are increasingly turning to credit to make ends meet – but the banks are quickly closing the taps.
South Africans are increasingly turning to credit to meet their daily costs, but banks are becoming increasingly cautious in offering credit.
“It is more important now than ever before that consumers carefully consider their ability to repay before taking on additional credit and seek advice from financial institutions who granted the facilities if they find themselves struggling to meet their debt obligations,” said Experian’s Jaco van Jaarsveldt., which measures the rolling default behaviour of South African consumers with Home Loans, Vehicle Loan, Personal Loan, Credit Card and Retail Loan accounts, deteriorated from 3.
“These findings have significant implications for financial institutions operating in South Africa. With an increased risk of defaults, particularly in home loans and credit cards, banks and other lenders may need to reassess their risk management strategies and lending criteria,” said Van Jaarsveldt.
Although Absa’s group headline earnings increased by 1%, they dropped by 18% to R14.676 billion when looking solely at South Africa.
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