All around the world, countries have been hit by all types of crisis due to COVID-19. Every country has to deal with social, educational and mainly economic hardships. The South African economy has not been an exception. The country’s government took measures to tackle the crisis at a national level to stabilize its economy and prevent economic growth from slowing down. Losses in government revenue were predicted and there was a need to take action to avoid further damage to the economy. There have been many obstacles to be sorted out as a country such as halts in manufacturing and mining, job losses, and reduction of activity in sectors like construction, transport, and trade, among others.
Amongst all these hardships, the community has also had to face the necessity to pay back their old debts, a situation which has become more and more difficult amid this context spread on a worldwide scale. Moreover, and also worsened because of the pandemic that has hit the Earth, the population has had to incur in new debts to be able to go on with their lives and businesses. According to several sources, in 2018, South Africans had started to repay their debts and the panorama was beginning to improve. However, nowadays, citizens have been forced to borrow money in a pursuit to make ends meet. Most young people are running up huge debts only to be able to acquire what is needed to fulfil their most basic everyday needs.
In order to face the urge to repay debts all around the country, some solutions have been presented. There is a need for South Africans to take action in some way, clean up their finances and cease to struggle. The economic environment is not certain and citizens have to take action in any other way to meet their debts.
Experts have suggested debtors to negotiate their debt’s interest rates. It has been said that they could lower interest rates on all types of loans, and that it could get as low as 0%. This could happen should debtors get in touch with a debt counsellor. Debt counsellors are capable of renegotiating people’s unpaid money commitments, giving them the chance to give all the money they owe back, according to their economic possibilities. They create a link between debtors and creditors achieving interest rate reductions in the way.
Not every country has a system like the South African Debt Counselling Rule Set (DCRS). This is a useful tool which the population can use as an advantage to beat the burden of debt. Although there has been some progress as regards the vaccination that will be necessary to get back to “normal” life, there is still a great deal to work on. People will need to adapt to the new situations. This financial tool will become of paramount importance, as a tool to aid South Africans who have been burdened with debt.
It should not be necessary that young people had to cut back on their health insurances, to mention one example, even more considering that health service is crucial in pandemic times. It is necessary that citizens have the chance to manage the debts they have inquired into. COVID-19 has hit the population of the Earth in many ways, people have been trapped by debt in ways they would have never thought about at the beginning of the year 2020. It is said that the level of money owed to creditors is likely to continue increasing as this year goes by. However, opportunities like this one which could set debtors free of the “debt traps” should be taken, they are sign that we can improve our economic situation without waiting for this year to end.
