SA women have less debt than men, but face bigger risk for over indebtedness

South African women have less debt than men, but they have more unsecured debt, making them more vulnerable to becoming overindebted than men.

More than 99% of a debt counselling company’s female clients have unsecured debt, 80% have personal loans and almost 50% have credit card debt.

This indicates that women borrow money for daily living expenses and not to acquire assets, such as a house, says Charnel Collins, CEO of National Debt Advisors.

According to the Stats SA Inequality Trends in SA report of 2022, women in South Africa earn on average 30% less than men for doing the same job.

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The same report states that about 50% of South African households are headed by women and they are more likely to be poor than male-headed households.

Even more concerning is that the unemployment rate is significantly higher for women at 36.5% than for men at 30.3%.

Women are also more likely to work in low-paying jobs with little job security, while they are also more likely to work part-time or in temporary positions, which can lead to financial insecurity.

Gender inequality even in debt

Collins says the socio-economic inequalities prevalent in South Africa makes women prone to getting into debt traps.

“Women are often the primary caretakers of households and with the increasing cost of living coupled with a pay gap, it is not difficult to see how this can lead to financial insecurity.”

Women are also often paid less than men for doing the same job, which means that they have to work longer hours to make ends meet.

This increases their stress levels, and they are more likely to use credit to bridge the gap in their finances, Collins says.

She also points out that, in a country ravaged by gender-based violence, the home life that many women experience may also lead to financial challenges for them.

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“While it is often underrated and far less reported, financial abuse is a form of domestic violence. It takes many forms, including all types of theft, fraud, exploitation, pressure related to wills, property, inheritance, financial transactions and the misuse or misappropriation of property, possessions, or benefits.”

A report by the National Income Dynamics Study – Coronavirus Rapid Mobile Survey in 2020 showed that during the Covid-19 pandemic, women were more likely to lose their jobs or have their hours reduced.

Women were also more likely be forced to leave their jobs to take care of children during lockdowns, which further exacerbated financial insecurity. However, women have not benefited from the same rate of job recovery since early 2020 as men.

Collins says it is crucial to address the root causes of the problem, including gender-based pay discrimination, domestic violence and lack of support for single-parent households.

“Financial education and support can also play a vital role in helping women become more financially independent and overcome debt.”