Unsecured lending surges to R381bn

2012-10-24 10:22

Pretoria - Unsecured loans in South Africa surged by 21% to R381bn in the year to June, the Reserve Bank said on Wednesday, as banks continue to plough into the profitable and potentially risky market.

The SA Reserve Bank also warned in its semi-annual review of the financial system that planned global liquidity regulations in their current form could hurt the economy.

South African banks have ramped up unsecured loans - high-interest loans including credit cards and overdrafts that aren’t backed by collateral - to offset weak corporate demand for credit.

Some analysts have warned there may be a bubble forming.


  • justice.league.9469 - 2012-10-24 10:46

    What happened to the credit control act? These days I get a lot of texts saying: New car or cellphone even though blacklisted. Consumers are thrown into debt everyday more and more

      napolita.kio - 2012-10-24 11:21

      "Consumers are thrown into debt everyday more and more" - Who is throwing the consumers? - Are these consumers minors (such that they need to be told what not to do)? - Is it illegal to "throw these consumers into debt"?

      justice.league.9469 - 2012-10-24 12:21

      Companies have a social responsibility towards consumers to protect them. So by offering them loans or incredible deals without doing a affordability check on them, they are transgressing.

      napolita.kio - 2012-10-24 12:53

      So if it's true that "Companies have a social responsibility towards consumers to protect them" then I accept your point. However, the question is: Is it true that "Companies have a social responsibility"? What exactly is "social responsibility" in relation to people's freedoms(i.e people have a right to do with themselves,including injuring themselves, what they whatsoever please? Where is personal responsibly in this case? I further accept that such "social responsibility" may have been acted by parliament; which begs the question, is it constitutional for companies to carry out "social responsibility" on you and me? My point in this regard is that there really is no such a thing as "social responsibility". It's a myth! As a business owner, beyond ensuring that I will get paid by a customer, I could careless whether the customer is stretching himself financially. Every person MUST look after themselves, failing-which they should seek help(which will most likely have to be paid for).

      justice.league.9469 - 2012-10-24 13:45

      That is why the credit control act was initiated by the government in the first place. So that companies will be held accountable. Many companies complained about the act claiming they would go bankrupt. Sad to say while the credit control act is a great idea it isn't enforced. The prevention of bad debt is much better than recovering from it. I do understand the pressure of running a business but offering a car/cellphone (sometimes luxury items) to a person already blacklisted will only have one outcome everyone losing out.

      napolita.kio - 2012-10-24 14:27

      But why are citizens not held accountable for applying or accepting offers that they cannot afford? But wait, why should they be in the first place? Remember this is a FREE country, and there's absolutely nothing wrong with a business owner making business offers. For the record, some of these people who are indebted most likely lied about their other debts when entering into a new financing agreement. The idea that human behaviour can be protect or controlled through laws/legislation is completely misplaced. I'd further state that it's an impinging of ones to expression for government to dictate to me when and by how much I can get into debt. What's next? Legislating how much alcohol one can drink and there by placing "social responsibility" obligations on liquor sellers so "ensure" people do not drink too much?!? I would like to see a record of the items bought by the indebted; I bet my life it would likely to be discretionary items. That is, it would "nice" if one got indebted because they had to buy a book or some other capital item. Remember companies are making offers not forced. But then again, once forced it can't be called an offer, can it? That would amount to extortion, which is criminal. DISCLOSURE: In my last sentence of the last post i started the line with "As a business owner,....". Please note I did not intend/imply that I own a business as I do NOT as a matter of fact own a business (one that deals with customers).

      justice.league.9469 - 2012-10-24 15:02

      That is why major cellphone companies require a 3 months bank statements when signing potential contracts. I dealt with private schools where the school fees are in excess of R30k a year. The parents will pay the first month and then stop. After numerous letters from lawyers the parents are put under administration whereby the school is lucky to receive only R200 a month then. So yes the parents should've enrolled their child in public school, but the school is also guilty by not doing a proper affordability check.

      napolita.kio - 2012-10-24 15:49

      The reason cellphone companies require those statements is so they can protect THEMSELVES. And there goes the lesson right there...protect yourself. For example, if people began to protect themselves they would stop signing "standard contract" that they do not even understand. ".. school is also guilty by not doing a proper affordability check.", I think the word "guilty" is a very strong one on the basis that they simple lost money or have a potential to lose and did nothing wrong; but I get your point. In any case, the laws we have allow for specific ways of recovering owed money. By the way, in the absence of available cash, there's absolutely nothing wrong with the old way of shopping called lay-buy[sic]. I am knowingly taking the risk of sounding preach by saying that it would not hurt if "elementary" books like "9 steps to financial freedom" were a statutory reading (part of school curriculum) for the majority of people. All in all, much of the laws the world-over are trying to accomplish what they cannot, which to control human behaviour. All citizens need are laws to resolve disputes among one another, protect one from the other. Most of the laws are really just fluff.

  • thepatrickwinter - 2012-10-24 10:52

    Stupid is as stupid does. Greed, one of the deadliest sins, the fallout will be unsurpassed.

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