Confirmation Of South Africa’s Frozen Economy

  • 1 year ago

The OECD’s report confirms what we already knew, South Africa’s economy is ‘the worst performer amongst its peers’ with the lowest GDP of all the countries in the G20, The Organisation for Economic Co-operation and Development found South Africa’s year-on-year growth to be 0.5 percent, lower than any other nation whose economies remained stable or were on the up

No surprise then to learn, that South Africans are struggling to manage to pay the bills and afford the weekly shop, despite working around the clock. A recent report by Nielsen found that over half of us are making cutbacks on the most basic costs: gas and electricity bills, food shopping and takeaways.

There were also concerns last year regarding South Africa’s most popular online lender Wonga after their U.K. counterpart went into administration after increased legacy financial compensation claims. However, a statement from the South African lenders reassured customers that they were unaffected by events in the U.K. and are operating ‘business as usual’.

With recent news about the economy and the ever-growing cuts that we are being forced to make on our household expenses, it is no wonder that this news was well-received.

Data on the average reasons that people in many parts of the globe, turn to online short-term lenders like Wonga, is in line with the findings of the recent Nielsen Consumer Confidence Survey. Short term lending is a response to the struggle that ordinary people are faced with when it comes to simply keep their heads above water when an unexpected bill throws careful monthly budgeting into chaos. The Guardian suggests this is fallout from years of rising living costs and frozen wages, issues that governments and financial institutions have failed to address.

Regardless of your opinions on the practices of online lending, when left to deal with the increasing demands on our personal finances, online short-term lending has serviced a need for emergency cash fast that no other institution is covering quite so well, or conveniently. Which makes them likely to remain a fixture for the future.

Source: Wonga