A Business Report article points to the effects of lower interest rates and cheaper imports:

“The Consumer Profile Bureau said there was a strong 5.2-percent increase in civil summonses for debt, and Statistics South Africa data show there has also been an 11.8 percent increase in the value of civil judgements, showing that debts had grown in size compared to last year.

Fred Steffers, managing director of the Bureau said this was clear evidence that South Africans were becoming over-indebted and that a significant percentage of the population could no longer afford to service their debt.

“For those of us who had any doubts that the inflation figure of around 8 percent did not reflect the spending spree accurately, the latest numbers from Statistics South Africa should serve as a wake-up call,” Steffers said.

The number of actual civil judgements for debt showed a significant decline of 8.1 percent compared to last year, indicating that more consumers were negotiating with their creditors to avoid being negatively listed on credit bureaus.

“This is backed up by the credit data we hold on consumers which shows that rather than just ignoring it or hoping it would go away as happened in the past, indebted consumers are talking to their creditors and trying to negotiate reduced payments over an extended period of time,” he said.

Steffers said he believed one of the reasons for the reduction in the number of judgements was because consumers were beginning to realise that a positive credit record was in their best interest as it opened up the possibility of both more and cheaper credit.

“Once a person has been adverse-listed it becomes much more difficult to obtain credit and often more expensive to borrow money.”