Financial impact and concern regarding ability to pay loans remain high
Ahead of the beginning of the third COVID-19 wave, 61% of South Africans reported they’re currently being negatively financially impacted as a result of the pandemic. Incomes have primarily been impacted by job losses, and reduced salary and work hours. Consumers remained highly concerned about their ability to pay their bills and loans, with credit obligations topping the list of bills they said they won’t be able to pay.
Just over two in five consumers (43%) reported they’ve been in arrears for a bill or loan in the past three months, indicating a substantial proportion of South Africans are still struggling to make their payments. Of consumers who missed payments in the last three months, 31% have missed a payment on one account, 33% on two accounts, and 17% on three accounts.
Opportunities for credit growth
Consumers do however, express the need and appetite for credit — 85% of households consider access to credit extremely, very or moderately important, but only 27% believe they currently have sufficient access to credit. A third (33%) plan to apply for new credit or refinance existing credit within the next year. Channels of preference when acquiring new credit include in-person at a branch (33%), online via a computer (19%), and online via a website on a mobile phone (18%).
South Africans remain hopeful and resilient
South Africans remain upbeat and positive — 75% are optimistic about the future, with 52% confident their household finances will fully recover in the next 12 months. To weather the pandemic storm, consumers have made budgetary adjustments by cutting back on discretionary spending, and reducing digital services, subscriptions and memberships. Nineteen percent said they moved to a cheaper home, and to supplement income, 18% of consumers said they started doing gig work (freelance work), 17% started a small business, and 17% began selling goods informally.