The devastating low levels of inflation, loss of jobs and the low currency rate are just about the few aspects that seem to suggest that our economy is in leaps and bounce. Data seems to suggest that the inflation keeps rising at an indirectly proportional level to the salary increase. The consequence of this on an individual level is that goods which you buy on a normal basis become more expensive. This is one of the primary reasons why people opt for debt. Debt offers them the convenience to pursue the things they need while maintaining the standard of their lives.
South Africa, the government in particular has gone through various media channels to give cognisance of the dire consequences of debt and also to instil a mentality of saving amongst people of South Africa. There have been many debates amongst economists as to which alternative between saving and spending is to the affirmative to a well-functioning economy. John Maynard Keynes believed that if everyone saved money, the demand of goods would drop thus causing the economic growth to stall. While the notion seems appealing, we know though that when the demand falls, prices will fall which will increase the demand. This is the concept of how sales work in many stores. Savings also allows for bank to fund businesses, this can help businesses to be more productive and to hire new employees which is beneficial to the economy.
There is no doubt that savings is important by the deferred utility in the form of future consumptions. Should they not be able to save, short term loans seems to be an attractive option for most as they can be settled within 30 days and do not leave one in quandary. This form of credit is so popular in the County and if not properly managed can lead many South Africans into a more cohesive state of dependency on credit. This is a space that needs to be monitored on a regular basis.
Debt Eazy is of the opinion that credit institutions pursue profits at the expense of determining the sounds state of affordability. They also say that most institutions give credit without assessing the bank statements for affordability. They use a payslip as the basis of granting credit. This is a bad practise as a payslip doesn’t show how indebted as person is and how much they may be compromised by the credit you give them. We’ve assessed clients where you find they have four different types of loans from different companies and sometimes they use one debt to pay the other. Debt Eazy says that there needs to be a reinforced ethical framework that is perpetuated throughout the industry to address how companies should approach their business. They also suggest that risk evaluation should be standardized so that there is a uniform approach to risk assessment. Short-term loans are good only when you use them sparingly for a purpose that doesn’t ordinarily happen in your life. Debt Eazy says credit providers need to be prudent in the manner they approach business and not prioritise making profits at the expensive of applying their minds in doing so.
Life is tough as it is in South Africa and it doesn’t have to be made worse by credit providers that are reckless in the manner they give credit.