Did you know that 37% of the population (who have loans) are not able to pay loan instalments? It’s a fact that as 2020 was coming to an end, little by little the economic activities in South Africa began to soar. A big portion of industries were able to re-start their businesses and go back to the production game.
At the beginning of the same year, the economic situation in the country had been changed by the advent of the Covid-19 pandemic. The population had been severely hit by the consequences produced due to the measures taken to protect the South African sanitary system, which, at the time, was more necessary than ever before. Such measures, like the long lasting hard lockdown imposed by the administration, produced impacts in most of the spheres of government and society.
The overall country’s panorama constantly showed signs of fluctuation throughout the year. Over the past months the regulations were loosened and adjusted to the new context, the need for flexibility has been one of the most important characteristics of the past year, and it can be said it will continue to be so. However, South African consumers’ situation has not improved as wanted. One clear cut example of this is the fact that plenty of citizens who had requested personal loans are not able to repay them fully.
Earlier last year, besides the protective measures taken by governments around the world, when people saw their economic situation become unstable and fragile, they began to take other measures intended to protect their individual households and to adjust their expenditures. Nowadays, citizens are running out of preventive actions and yet far from reaching their pre-pandemic economic situations.
Although the production sector was capable of improving their activity to a great extent, individuals were not able to recover at the same pace. After so many months reducing the money they spent on luxury goods, while at the same time many items became exclusive, after borrowing money from family members, and spending life savings, we have arrived at a critical moment in which we do not have many more resources. One of the strategies chosen by a great number of South Africans was to obtain personal loans offered by financial institutions. Nowadays, 37% of those who choose that path are not able to pay back their debts (like accounts and personal loans).
When looking at the new trends, measures and joint efforts made by government and citizens together it is possible to assert that the economic situation may tend to take a stabilization path. The sanitary situation seems to be improving as well, the last Weekly Epidemiological Update released by the World Health Organization announces a fall in the number of cases reported and in the numbers of deaths.
However, the question of whether consumers will hold on until that moment comes needs to be asked. It is already known that the process of arriving at a global situation as similar as possible to the pre-pandemic context is going to be long and gradual, and it will require that individuals maintain their efforts more time. There is also a portion of society which has had to endure stronger hardships, we could mention those who have seen a reduction in their working hours or even lost their jobs or closed their businesses and faced unemployment.
The global situation and economic, social and educational contexts are evolving as the COVID-19 situation evolves. Citizens all over the world are doing so, too, in an attempt to take care of themselves and their families economically, and keeping themselves healthy.
Now, a new variant of the virus is part of the concern, as a sign of this evolution, which urges the citizens of the world to unite. South Africans will continue to find new ways to overcome these difficulties and pay their debts (like personal loans) in hope that the amount of individuals who meet their payments increases.
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