Business & Economy

Monday, 19 April 2010 14:33

SA consumers still under pressure

{pp}The South African consumer continues to seek out short-term personal loans to try and keep their heads above water, but there are signs that interest rate cuts are starting to take effect.

That’s according to data drawn from the financial services product aggregator operated by Rival Financial Services which is a product owned by local publishing and research house Rival Industrial. Marc Ashton from Rival comments: “While it is still early days, this financial product aggregator has provided us with some interesting insight into where the South African consumer is at in terms of confidence and whether they believe we are seeing a genuine economic rebound.”

Personal loans and debt consolidation remain high on the list but there are signs that consumers are now considering medical and life insurance products as well as savings consultations. After three weeks of running the aggregator the following product classes have seen the most demand:

  • Personal loans – 30%
  • Medical insurance – 20%
  • Life insurance / savings consultations – 13.33%
  • Debt consolidation – 13.33%
  • Short term insurance – 10%
  • Funeral insurance – 7%
  • Foreign exchange trading accounts – 3.33%
  • Home loans – 3%

We would interpret this to mean that while many South African consumers are battling to make ends meet each month and are still seeking short-term credit, there is less pressure on a segment of the population who are seeking to buy insurance cover. Ashton said he was a little surprised by the demand for funeral insurance products and would be watching this this trend closely as feedback from industry indicated increasing demand for this product.

Demand for home-loan and trading products (specifically foreign exchange) remains low. Rival will provide monthly updates to industry as it attempts to map out trends and the mood of the local consumer.

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