Pretoria - Cabinet has approved measures aimed at assisting over-indebted consumers and households by strengthening their financial stability.
The initiatives include education and awareness programmes to improve consumer literacy on credit and financial matters.
“The Minister of Finance will also take steps to encourage employers to assist their over-indebted employees by investigating employees’ emolument attachment orders for validity, and providing employees with financial wellness mechanisms,” said Acting Performance Monitoring and Evaluation Minister Angie Motshekga.
Briefing the media following the national executive’s last meeting for the year on Thursday, Motshekga said she hoped that these initiatives will educate consumers on the risks of over-indebtedness and prevent households from becoming over-indebted in future.
Finance Minister Pravin Gordhan and Trade and Industry Minister Rob Davies were tasked by Cabinet to implement preventative measures to minimise the risk of over-indebtedness through future loans.
Recently, Davies raised concerns on how easy it was to get garnishee orders (an automatic deduction from somebody’s salary before they get their salary), which sometimes take a sizeable chunk of a person’s wages.
He said the obtainability of garnishee orders needed to be tightened, while credit providers must assess whether a person can afford credit or not.
This, as credit bureau statistics for the quarter ended September showed that consumers were drowning further in debt.
Credit bureaus held records for 20.29 million credit-active consumers, an increase of 0.4% when compared to the 20.21 million in the previous quarter.
Consumers classified in good standing increased by 9 000 to 10.53 million consumers.
As a percentage of the total number of credit-active consumers at 51.9%, this reflects a decrease of 0.1% quarter-on-quarter and 1.1% year-on-year.
The number of consumers with impaired records increased by 71 000 to 9.76 million from 9.69 million in the previous quarter. As a percentage of the total number of credit-active consumers at 48.1%, this reflects an increase of 0.1% quarter-on-quarter and 1.1% year-on-year. – SAnews.gov.za
