There was a drop in the number of summonses issued to people battling to repay debts.
"The total number of civil summonses issued for debt decreased by 4.3% to 54886 from 57554 in the three months ended February 2016 compared with the three months ended February 2015," read Stats SA's report released yesterday.
This was despite the high unemployment rate and the cost of credit becoming more expensive, as the SA Reserve Bank tightened monetary policy by raising interest rates.
The document also showed that the total number of civil judgments recorded for debt decreased by 9.6% to 22947 from 25050.
And the total value of civil judgments recorded for debt increased by 0.5% during the same period.
The largest contributor to the decrease was money lent, which showed that financial institutions had implemented successful collection instruments.
Outstanding debt such as salaries and wages, medical fund debt, sponsored debt, class and tuition debt, tax, assessment rates and property levies also contributed to the drop.
Economist Azar Jammine said the number of summonses had dropped partly due to the legal process of collecting debt becoming complicated and inefficient.
Also, consumers and lenders were finding it easier to reach repayment agreements on their own rather than going to court.
"And since the introduction of the National Credit Regulator, consumers are now compelled to use debt counsellors instead of heading to the court," said Jammine.
The report said that in February 22947 civil judgments for debt amounting to R361-million were recorded.
Economist Dawie Roodt said the decrease was much-needed good news. "But it can also tell us that many people are [already] bankrupt and we now have fewer people who can go bankrupt.
"The statistics might also indicate that the debt quality and credit criteria used by banks might have been sharpened up a bit," he said.
He said the number was volatile and we could see an acceleration of civil cases for debt in the coming months because interest rates are being hiked.
He added that it would take more than eight months for householders adversely affected by rising interest rates to have their vehicles repossessed.
sibanyonim@sowetan.co.za
Fewer people going bankrupt
There was a drop in the number of summonses issued to people battling to repay debts.
"The total number of civil summonses issued for debt decreased by 4.3% to 54886 from 57554 in the three months ended February 2016 compared with the three months ended February 2015," read Stats SA's report released yesterday.
This was despite the high unemployment rate and the cost of credit becoming more expensive, as the SA Reserve Bank tightened monetary policy by raising interest rates.
The document also showed that the total number of civil judgments recorded for debt decreased by 9.6% to 22947 from 25050.
And the total value of civil judgments recorded for debt increased by 0.5% during the same period.
The largest contributor to the decrease was money lent, which showed that financial institutions had implemented successful collection instruments.
Outstanding debt such as salaries and wages, medical fund debt, sponsored debt, class and tuition debt, tax, assessment rates and property levies also contributed to the drop.
Economist Azar Jammine said the number of summonses had dropped partly due to the legal process of collecting debt becoming complicated and inefficient.
Also, consumers and lenders were finding it easier to reach repayment agreements on their own rather than going to court.
"And since the introduction of the National Credit Regulator, consumers are now compelled to use debt counsellors instead of heading to the court," said Jammine.
The report said that in February 22947 civil judgments for debt amounting to R361-million were recorded.
Economist Dawie Roodt said the decrease was much-needed good news. "But it can also tell us that many people are [already] bankrupt and we now have fewer people who can go bankrupt.
"The statistics might also indicate that the debt quality and credit criteria used by banks might have been sharpened up a bit," he said.
He said the number was volatile and we could see an acceleration of civil cases for debt in the coming months because interest rates are being hiked.
He added that it would take more than eight months for householders adversely affected by rising interest rates to have their vehicles repossessed.
sibanyonim@sowetan.co.za
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos