SA households in better position to incur and service debt, index finds
The government should be commended for not having a knee-jerk reaction after the detection of a new Covid-19 variant last week, which led to some countries imposing travel bans against SA and other Southern African countries.
This was the view of Altron Fintech MD Johan Gellatly, on Thursday, during the release of the Altron Fintech Household Resilience Index for the second quarter of 2021.
The purpose of the index is to assess the state of micro-lending in SA in terms of the ability of borrowers to repay their loans.
The index showed consistent improvement in the ratio of household income to debt costs, with an improvement of 20% over the past two years.
The index — which Altron Fintech developed in partnership with Dr Roelof Botha, economic adviser to the Optimum Investment Group — showed that the average household in SA enjoyed a more advantageous disposition towards incurring and managing debt than before the coronavirus pandemic.
The index showed there was consistent improvement in the ratio of household income to debt costs, with an improvement of 20% over the past two years.
Responding to a question on what he expected the impact to be on the resilience index as the tourism and the hospitality sector had lost more than R1bn since recent travel bans had been enforced, Gellatly said the government had obtained sound advice on how to react to this new variant.
“I would like to congratulate the government and commend the government that they have taken a measured approach.
“We have to have our businesses operating for this festive season because the tourism and hospitality industry has taken a severe knock.”
Gellatly said some of those operators would never open their businesses again.
“What we should not lose sight of (is) each of these businesses employ three or four or five people. If you have a thousand of these, that is five-thousand people that you employ.
“That is the power of the multiplying effect of the sector and how the sector is fuelling the growth of our economy,” Gellatly said.
Botha said the world would have to learn to live with Covid-19.
“The fact is that some of the emerging markets and developing economies will take forever to reach herd immunity while high income countries who have reached vaccination rates of between 70% and 80% have new infections of between 50,000 and 100,000 per day.
“If the fatality rates continue declining, then we can start thinking of opening up again. Our sympathy lies with the tourism industry,” Botha said.
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