SA citizens coping despite rising interest rates

SOUTH Africans seem to coping with their dept, despite the rising interest rates, said Stats SA recently.

“Data from the South African Reserve Bank and Stats SA’s statistics of civil cases for debt release indicates some resilience on the part of South African debtors,” it said in a statement.

Last year the South African Reserve Bank hiked the repo rate twice. In July it was increased from 5.75 per cent to 6.00 per cent and in November it was once again raised to 6.25 per cent.

“A further two increases were implemented in the first quarter of 2016, with a rise to 6.75 per cent in January and a further increase to 7.00 per cent in March. Servicing debt becomes more expensive when interest rates are raised. But South Africans seem to be keeping their debt in check, despite these increases,” Stats SA’s said.

According to the South African Reserve Bank’s Quarterly Bulletin for December 2015, the household debt-to-disposable-income ratio has actually dipped from 88.8 per cent in the first quarter of 2008 to 77.8 per cent in the second quarter of 2015.

What’s more, the statistics of civil cases for debt release, which covers statistics from Magistrates’ Court offices, have revealed that the number of summonses issued for debt have also decreased.

“These reveal that even though the value of bad debt covered by the judgements was up by 7.2 per cent in 2015 compared with 2014, the actual number of judgements against defaulting debtors fell by 6.8 per cent. The number of summonses issued for debt also fell over the same period, by 12.8 per cent.”

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