It’s a familiar story but for platinum miner, James Ntseane it is having a huge impact on his life. A few years ago he borrowed about $900 to pay for a family funeral from african Bank Investments. Shortly after he borrowed some more money for a house extension and then a new sofa. A few years later and his loan has spiralled to almost 31000 rand, his repayment difficulties now mean that 13% of his salary is now automatically deducted to service the loan. He has know idea how much interest he is paying simply that he struggles to exists on what is left of his salary.
There are now millions of South Africans in serious levels of debt. But this is not the low interest, secured debt that many people take for granted. There is a flourishing market in South Africa with firms providing easy terms on unsecured loans. Unfortunately these are often on very high interest levels of about 80% being very common.
The South african miners have of course been in the news over the last few months. The strikes last year claimed 46 lives during the violence surrounding the miners protests over pay. There is no doubt that this spiralling debt has been the reason for many of the unrest with miners simply finding themselves swamped with these unsecured loans.
It is of course a concern for any economy when there is a large value of consumer loans which are not backed up with corresponding assets. The high levels are a real worry for South Africa’s National Treasury, unsecured debt is now roughly 40% higher than a year ago – a huge increase in a short time.
Many South African miners feel trapped by these debts and low wages. James Carroni told me that there would definitely be more trouble unless the miners received some help. He said the situation in many ways mirrored some of the problems the UK had in the early 1980s with the closure of so many mines. I used a proxy server to help me watch UK TV online which I found here – http://www.uktv-online.com/ and saw the videos of the UK mining dispute. The situation could be much worse here especially with the hard handed tactics used by the South African Police. The African miners are becoming more and more desperate that is for certain.
If you’re interested here’s information on YouTube about where to buy a proxy as specified above.