Business Report‘s Ethel Hazelhurst:

“South African consumers most commonly access credit through retail store cards. Carel van Aardt, a research professor at the Bureau of Market Research at Unisa, said more than 16 percent of South Africans – about 5 million – used store cards.

The calculation was based on the findings of the all media and products survey (AMPS) conducted last year, he said. The figure related to the number of people accessing credit; the rand value of the credit was not covered by the survey.

He said the high proportion of people using this form of credit represented a shift from shopping at discount stores to branded retail store cards.
Far fewer people accessed credit through banks, despite attempts by the banking sector to be more accessible.

While credit card debt is available to a smaller number of people at the upper end of the income scale, Van Aardt’s analysis shows a surprisingly large proportion of people accessed debt through credit cards: 6.32 percent. The number is based on the number of credit card holders.

hough mortgage debt is by far the biggest form of credit in terms of value – more than 65 percent. Only 2.4 percent of people have mortgage loans.

Van Aardt explained: “A large number of houses in South Africa are funded by government, own funds and other forms of financial arrangements, for instance personal loans and employers’ contributions.”

The 4.5 percent rise in interest rates over the past two years has added to the cost of borrowing, raised the spectre of debt defaults and dented the growth prospects of both the banking and retail sectors. It has reduced the growth prospects of the entire economy as the impact feeds its way through the system.”

Two other articles in the Business Report by  Ethel Hazelhurst based on Carel van Aardt’s report can be found at:

R1.1 trillion in debt a ‘shocking’ burden for SA 

Cost of debt set to crimp spending