A recent study by Genesis Analytics, in partnership with the Financial Sector Conduct Authority (FSCA), concluded that over-indebtedness remains a challenge in South Africa – more than 50% of the country’s credit-active consumers can be considered to have too much debt, which resulted in bad credit records for 48% of all borrowers.

This means that nearly half of the 27-million adults using credit have difficulty keeping up with debt repayments.

Experts at National Debt Advisors (NDA) have been monitoring the number of South Africans undergoing debt review in the last two years and saw almost 8% increase from the year 2020-2022.

Over-indebtedness is linked to national economic conditions and exacerbated by the Covid-19 pandemic. Slow economic growth and high unemployment, coupled with rising prices for food, petrol and other basic goods have had a significant impact on the credit needs of South Africans and their ability to repay debt.

Sebastien Alexanderson, founder and debt counsellor at National Debt Advisors, says that money issues are not only affecting consumers’ pockets, but they also affect your emotional, physical, and mental wellbeing.

Recently, market research consultancy Eighty20 found that members of the mass credit market in South Africa can be characterised as ‘stressed’ in relation to their level of indebtedness. The market research consultancy classifies people who are obliged to pay more than 70% of their income towards debt as being over-indebted.

“The trick for staying debt free is to start with the most basic financial step – simply draw up a budget and stick to it as far as possible,” says Alexanderson.