29 July 2015 - The second annual Wonga customer survey has shown that a greater awareness and understanding of how money works is much needed to get on to the road to financial wellness. More than18 000 customers responded to the survey which was conducted in May this year, many admitting that saving remains a massive issue.
Wonga SA CEO Brett van Aswegen said the results of the survey weren’t surprising given the general consumer behaviour around saving and budgeting in the market. “It is imperative that consumers are educated about the various issues related to credit and to get financially fit to avoid getting into debt. Savings help prepare for unforeseen emergencies, but too many consumers don’t have the additional financial means or the discipline to save.”
About 43% understood what a credit report was and more than 77% said they didn’t look at the interest rates and fees on credit applications. Furthermore, 67% of customers were aware that they were able to get a free credit report once a year. “In an effort to better manage their finances, consumers should always look at their credit report to see what steps can be taken to improve their credit score and rectify any inaccurate information on the report.” adds van Aswegen.
He said the survey results underpinned the views shared by the National Credit Regulator and National Treasury, that a strong culture of saving is needed in the country. More than 32% of respondents indicated that they saved on a monthly basis. “Any unexpected or emergency expense can present financial trouble if there aren’t any savings or appropriate insurance cover in place.”
Debt management company, DebtBusters agreed saying South Africans lacked the means and the knowledge to save. Ian Wason, CEO of DebtBusters, pointed out that the inability to save went hand in hand with accumulating debt. “Half of all credit-active consumers are burdened with debt and have little or no room in their budget for savings. And those who are unable to generate savings do not have funds to fall back on for emergency expenses.”
van Aswegen believes the longer consumers are left to wallow in spiralling costs of living and poor debt management, the more bleak the economic outlook for the country. “We need to take collective responsibility for the financial health and wellbeing of consumers. Being responsible in our approach to credit provision is the first step towards ensuring a stable and sustainable credit market in South Africa.”