Helpline reveals plight of debtors
August 22, 2008
By Ethel Hazelhurst
Insights into the problems faced by distressed debtors comes from a "debt repair helpline" set up by Absa in June. Johan Geldenhuys, the chief operating officer of Absa retail bank, said the helpline attracted nearly 20 000 callers, of which about half had been processed.
To get information about the type of problems faced, Absa surveyed about 200 people in administrative and middle-management jobs, who said they were in arrears or had "cash flow" problems.
Survey respondents each had between nine and 13 accounts and on average about R95 000 in unsecured debt, while 90 percent had few or no fixed assets.
Most were in a "potentially insolvent situation", with negative cash flow and low liquidity levels.
Geldenhuys presented the survey findings at a recent FinMark Trust workshop on over indebtedness. He gave a wider perspective of credit behaviour, drawing on data from credit bureaus. Last September the bureaus had records on 16.9 million "credit active" consumers, of whom 10.5 million were in "good standing", he said. Between them, "credit active" consumers had nearly 51 million accounts.
Geldenhuys said that of the calls processed by Absa, only 214 people had succeeded in getting additional credit, against the security of assets.
"We suggested alternative options for about 2 500," he said. These included selling assets.
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