Helpline reveals plight of debtors

By Ethel Hazelhurst

Insights into the problems faced by distressed debtors comes from a “debt repair helpline” set up by Absa in June. Johan Geldenhuys, the chief operating officer of Absa retail bank, said the helpline attracted nearly 20 000 callers, of which about half had been processed.
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Household debt animal not tamed yet – analysts

By Ethel Hazelhurst

Johannesburg – While the recent build-up of debt in South African households is alarming, there is no way of knowing how much worse it will get.

Nor do policy makers know whether overindebtedness will reach a point where debt defaults will threaten the financial system.

Andre Bezuidenhout, the Reserve Bank’s head of the financial stability department, made these points at a recent workshop on overindebtedness. The workshop was organised by the FinMark Trust. More…

Total number of civil summonses in second quarter dives by 9.1%

The total number of civil summonses issued for debt for the second quarter of this year took a dive by 9.1 percent, compared with the second quarter of last year, Statistics SA said yesterday.

However, there was an increase of 7.8 percent between June last year and June this year, the first year-on-year increase recorded since April last year.

The civil service strike during June last year was partially responsible for the year-on-year increase of 7.8 percent, due to the low base effect.
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Lenders focusing on the low end thrive on high prime rate

By Tom Robbins

Cape Town – While major banks’ loan books are feeling the pinch of higher interests rates and the downturn in the economy, unsecured loans by lenders focusing on the market’s low end are swelling.

Absa reported in its interims at the beginning of the month that its write-offs for bad debt had increased by 121 percent to R2.1 billion. Standard Bank said the following week that its bad loans as a percentage of credit worsened to 1.27 percent. More…

Thousands more debt counsellors needed

Johannesburg – South Africa needs 2 500 more debt counsellors to cope with its growing consumer crisis, debt counselling company Consumer Assist said on Wednesday.

The company’s chief executive officer Andre Snyman in a statement said: “The counsellors were needed “to cope with the needs of more than six million indebted consumers, who are losing homes at the rate of 2 000 a month and 6 000 cars a month”. More…

KZN’s help centres offer support for small firms

Durban – The KwaZulu-Natal (KZN) government has established one-stop help centres across the province to help reduce the number of small businesses that fail in the first two years.

“The mortality rate for small businesses is pretty high,” said Zweli Mkhize, the province’s MEC for finance and economic development.

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Absa expects delay in economic recovery

Johannesburg – Consumers were expected to remain under pressure as higher debt servicing costs and increases in the general cost of living continued to erode disposable income into 2009, the Absa Group said on Thursday as it released its first half results.

“The group expects growth of the South African economy in the short-term to be constrained by inflationary pressures, tighter credit conditions and declining levels of consumer and business confidence which, together with an uncertain global macroeconomic environment, are likely to delay an early recovery from the current economic downturn.”

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