South Africa’s rich and middle class only make up a small percentage of the population, but they hold the vast majority of debt in the country.
South African consumers are taking on unhealthy levels of debt, with the middle-class and ‘wealthy’ segments—those earning over R15,000 and R35,000 a month—suffering the most and seeing more than half their take-home pay going to pay off what they owe.
This involves an affordable calculation, which evaluates one’s income, expenses, and existing debt to ensure loan repayments can be met. Eighty20 said that South Africa’s debt-to-income ratio has been notably high, with estimates, when using the median, suggesting that this“This could either reflect potential data or modelling inaccuracies or indicate a broader issue with high debt burdens among South Africans.“In a significantly unequal country like South Africa, we believe the median is more insightful because a small percentage of the population earns significantly more than the majority.
“The segment is diverse in income, with some members just above middle-class earnings, while others receive multi-million-rand salaries,” said Eighty20.
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