Business News
Official warns millions of South Africans entering debt trap
Nov 3, 2011, 9:58 GMT
Johannesburg - A top South African official warned on Thursday of an increasing number of highly indebted families in the country, blaming rampant consumerism for the woes.
'We've spent money we haven't earned yet and we've spent it on goods that we don't need,' said Trevor Manuel, the country's planning minister and former finance minister.
About 8.8 million of the 18.84 million credit-active people 'are in trouble,' said Manuel, as they had impaired credit. Adding to the concern, the number of credit-active people is nearly double the number of citizens in formal employment.
Manuel was also quoted by news agency SAPA as warning about a low savings levels. Without this cushion people were taking loans at predatory rates when they needed cash.
He was speaking at a national consumer forum outside Johannesburg.
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