The higher a person's income, the more credit they are offered.
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The inaugural South African Financial Pressure Index (SAFPI) has highlighted that a good salary will not protect many people from debt, as the more an individual earns, the more credit they may be offered.
SAFPI is a monthly research initiative based on anonymised debt review application data from South Africans and is compiled by Debt Solutions 4u, a debt counselling company.
The first index was released in early August, revealing that most people who apply for debt review through Debt Solutions 4u spend more than half of their income on unsecured debt repayments; this includes personal loans, credit cards and store accounts.
Discipline needed with a good salary
Lead debt counsellor, Rowan Breeds, said the median applicant earns under R10 000 a month and owes R13 439 in unsecured debt, against R4 392 a month in repayments.
“The debt scales with the income, which is exactly why a good salary is no protection. Credit providers lend against what you earn, so earning more simply means qualifying for more,” he highlighted.
The index found that personal loans account for most money owed by applicants, followed by credit cards, store cards, other credit, cellphone contracts, furniture accounts, clothing accounts and student loans.
“The personal loan concentration fits what we see in consultations. A store account or a cellphone contract is rarely what breaks a household budget. A personal loan taken to cover other debt is.”
Most people already in debt review
Breeds said most people approaching a debt counsellor for help already had a debt review running in their name.
An individual can only be under debt review with one debt counsellor at a time. If someone is already listed, they need to transfer to a new counsellor, obtain a clearance certificate if their restructured debts are settled, or apply to the court if their circumstances have changed.
He added that their data cannot yet include repeat applicants; these are people who come back after 90 days or more.
“Our data starts in December 2025, so there is not yet enough history for the measure to mean anything. Reporting it now would say ‘almost nobody returns’ when the truth is that we cannot see far enough back to know. It waits until roughly 12 months of data exist.”
