Over-indebtedness: The silent crisis

Did you know that there is a great deal of lending to those in the lowest income brackets: according to National Credit Regulator data, 44 percent of new unsecured credit lines, and 31 percent of the value of those credit lines, go to those earning under R 10,000 (about $900) of income per month.

Those consumers, who are our employees, are evidently overextended. In March 2014, the NCR reported that nearly 60 percent of credit-active consumers were 1-2 months or more in arrears on their payments.

• Over 8 000 000 South Africa have defaulted on credit payments;

• Over 3 million garnishee order deductions take place each month;

• Over 25% of garnishee deductions result in the employee taking home less than is required to maintain themselves and their dependents;

• There are about 1 000 debt judgements daily;

• Employees earning less than R 96 k per annum are being immobilised through debt and related financial stress.

An employee who has financial challenges and is sinking in debt displays the following characteristics:

• Absenteeism

• Fatigue

• Job Stress

• Negligence

Alcoholism, fraud, money laundering, treachery and corruption are among the resultant behaviours from this difficult situation. These characteristics lead to low productivity in any organisation, poor quality production which ultimately results in financial loss.

Asher Health can provide a comprehensive over-indebtedness programme dubbed the Employee Financial Remedial Programme. To find out more, contact info@sequor.biz