There is more than R200bn in unsecured term loans outstanding in SA and more than R450bn if one includes credit cards, overdrafts and retail store cards. Independent analysts estimate that more than two-thirds of unsecured credit is spent on consumption or rolling existing debt.

It is therefore likely that a large portion of this enormous liability has no matching asset in the hands of the borrower. Our view is that unsecured lending is causing more harm than good in SA. It is a serious problem requiring government intervention.

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now