Consumers battling to repay debt despite low interest rate cycle amid lockdown
The Covid-19 pandemic and resultant lockdown is causing untold financial hardship for millions of South Africans.
Transaction Capital Limited owns the largest debt collection company in South Africa says CEO Dave Hurwitz, and its quarterly index highlights just how difficult it is for consumers to service their debt.
We have a database of 12-million non-performing South African consumers and we run a real empirical index every quarter and this is the worst reduction in the index we've seen since we've been running it, which is now four years old.David Hurwitz, CEO - Transaction Capital Limited
Wherever you look, whether you look at the BA reports the banks are issuing... what you're seeing is non-performing loan portfolios and provisioning policies really ballooning out at all of the lenders. The bank's provisions have increased anything from as low as 20% up to as high as 50%.David Hurwitz, CEO - Transaction Capital Limited
Hurwitz does not agree with the idea government is reportedly currently considering to ban blacklisting of consumers hit hard by the Covid-19 pandemic and lockdown.
If people don't have data, they'll just exit the markets... As soon as there is uncertainty in a lender's mind they'd rather try and lend to someone else... It makes no sense to take information away from people who need to make risk-based decisions.David Hurwitz, CEO - Transaction Capital Limited
Listen to the full interview in the audio below:
Source : https://www.123rf.com/photo_33804715_worried-young-african-american-couple-looking-through-bills-online.html?term=debt%2Bblack&vti=lj51dwle6urrcs53ho-1-14