What matters more for South African households’ debt repayment difficulties?

What is it about?

The importance of life events in consumers' financial health, especially the negative and sudden ones that come when you least expect them.

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Why is it important?

Debt is good, but saving a little money for the rainy day is even better. Unfortunately, many people are not in a situation where they can save anything. They are either getting paid too little, or their dependencies make life so difficult. So we need a sensible debt relief mechanism, especially seeing that most people get debt distressed due to events beyond their control not because they borrowed more than they can repay. People borrow with ability to repay, but the unplanned happens along the way and they find themselves in a situation where they cant. Regulators need to understand that and focus efforts on relief as a social protection tool. What we have available is not well articulated. We need the debt relief legislation to be more relevant and sensible. It is agonizingly lacking in many ways as articulated in my upcoming article in the JCFP "Relieving Consumer Over-indebtedness in South Africa: Policy Reviews and Recommendations".

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