Portfolio Manager at PSG, Amelia Morgenrood, said the stats are concerning with the latest figures revealing that there are 24,3 million credit consumers in South Africa, but only 16 million people are employed. Central South Africa has some of the highest unemployment figures in the country and coupled with the World Bank’s 2014/15 report titled the Global Findex Database, South Africans have been labelled the world’s biggest borrowers.

Morgenrood was reacting to Pick n Pay’s announcement that it is joining several other big retailers offering consumers credit at a low interest rate. She says the slow economic growth and credit rating downgrades, with the prospect of a third downgrade, are also adding to her concern…….

Morgenrood says “the problem is the interest you pay. If you can buy your groceries at Pick n Pay today and you can pay it at the end of the month, no problem. The minute you have to pay it off over a few months and there is interest added to the amount, how will you be able to afford your groceries next month?”

Pick n Pay’s announcement comes after the South African Reserve Bank (SARB) announced last week that it would be keeping interest rates unchanged due to economic uncertainty, a decision which economist Lullu Krugel said would negatively impact debt-ridden South Africans who were in need of some relief.

OFM News