Debt counsellors have cautioned of more financial distress for indebted South Africans as payment holidays come to an end, yet the latest survey by TransUnion shows that 91% of the respondents are worried about their ability to repay their debts and bills.
Banks offered clients a three-month debt repayment holiday in March in the wake of the economic impact of COVID-19.
FNB, ABSA and Nedbank have said clients who are still struggling may be given customised repayment assistance in the months ahead.
FNB said as, at 15 June, it offered almost 300 000 individual customers payment breaks through a separate credit agreement to the value of around R5 billion. Unlike the general Covid-19 payment holidays in the market, these have 60 months repayment term. But for customers with existing Covid-19 cashflow relief plans, the bank will extend the payment breaks by up to 3 months for those who qualify.
Debt counselling group Debtbusters says more than half of the households recently surveyed on average spend 64% of their take-home pay on debt instalments.
South Africa was already in recession before the COVID-19 pandemic struck, and the fallout of mainstays like mining and tourism have ravaged an already fragile economy. The central bank expects the economy to shrink 7% this year.