Debt counselling company DebtBusters said that it saw a 40% spike in enquiries for its service last month as relief measures to cushion the impact of COVID-19 on consumers came to an end.
The debt-management company said that the effect of COVID-19 payment holidays
granted by banks had faded,
and it was now seeing an overwhelming demand for debt counselling services.
Releasing its debt index for the fourth quarter of 2020 on Thursday,
the company said that with the economy in a fragile state,
consumers with unsecured loans, or loans not backed by assets were under severe financial pressure.
DebtBusters COO Benay Sager said that more and more consumers were losing sleep over debt.
Many in the country were already struggling with high levels of debt,
unemployment and financial insecurity before the coronavirus hit.
Sager said that as relief measures like payment holidays from banks came to an end,
it had been inundated with requests from cash-strapped South Africans seeking to lift themselves out of the burden of debt.
“So what we see happening is that a lot of the payment holidays offered to consumers in
the middle of 2020 have kind of worked there way out of the system and now the
consumers are feeling the real pressure of having to pay back the debt that they have.”
Sager said that data from previous years showed that many consumers find themselves under financial pressure.
“Last year was incredibly difficult for consumers and we’ve already seen a huge uptick in
terms of the enquiries in terms of people looking for financial help.”
Sager said that South Africa has an effective and efficient debt counselling sector and has encouraged consumers to get help.
BATTLING WITH DEBT