According to the National Credit Regulator (NRC), there are 27.46 million credit-active South Africans that have R2.37 trillion in debt from registered financial services providers.
1. This is an unsustainable position for South Africans and for our financial institutions as people are increasingly unable to pay back these loans. In the numbers contained below, we have a deeper look into the number of people with jobs and the number of loans and compare how they stack up. We are obviously all in favour of financial inclusiveness and access to all in the financial sector, but responsibility for a prudent approach lies in the first instance with the informed financial institutions that deal with a less-informed client. Yet we have many acts and regulations in place and our Reserve Bank is always quick to point out the stable position of our institutions.
The Financial Sector Conduct Authority (FSCA) is the market conduct regulator for financial institutions in South Africa. It oversees banks, insurers, retirement funds, administrators, and market infrastructures. The FSCAs mission is to enhance financial market integrity, protect customers, and promote fair treatment by financial institutions. Their vision is an efficient financial sector where customers are informed and treated fair.
2. Mountain of debt
In this article, we look at the debt of the country in the private sector only. One must obviously add the public debt to this number to get the full picture. Gross debt stock is expected to increase from R5.21 trillion (73.9% of GDP) in 2023/24 to R6.29 trillion in 2026/27 (74.7% of GDP) The country as a whole carries a gigantic total debt of R7.58 trillion. The Reserve Bank has raised interest rates constantly and the whole country has been forced into a slow and painful survival mode.
