South Africa Unsecured Loan Boom Leaves 40% of Borrowers in Default

South Africa’s unsecured lending boom has left 40% of borrowers in default and millions of people in a debt trap, according to fund manager Differential Capital, Bloomberg News reported. About 7.8 million of the country’s 60 million residents have taken out a combined 225 billion rand ($15 billion) of loans without collateral, mostly for short-term needs such as furniture and urgent family care, the Johannesburg-based firm said in a report. South Africa eased controls on unsecured lending in 2007 to boost financial inclusion in one of the world’s most unequal nations. Faced with growing criticism, the industry has battled to improve its reputation even as regulation has improved. Read more