Indebted South Africans face financial ruin amid interest rate hike and growing risk of scams

Amid a volatile global economy, weak rand, and interest rates at a 14-year high, South Africans are struggling with mounting financial hardships due to skyrocketing debt, higher electricity tariffs, food inflation, and steadily decreasing household income.

South Africans face a debt crisis as several SA banks see credit impairments soar amid high interest rates and consumer inflation. Majority of South Africans, particularly the middle and working class, are in debt and resorting to borrowing from banks, using credit cards or getting personal loans from family, friends or their stokvel to make ends meet.

To help with the elevating cost of living, 29% of consumers have taken on an extra job in the past six months. Furthermore, 19% of consumers have sold valuable items, including jewellery and art, to raise additional funds, while 20% have sold other household items.

“In desperation to survive financially, many South Africans may become vulnerable to ponzi, pyramid, or get-rich-quick schemes. Tough economic times have made it necessary for South Africans to find alternative, flexible income sources to make ends meet. However, these income streams need to be safe and vetted, such as the member companies of the Direct Selling Association of South Africa (DSASA),” says Rajesh Parshotam, chairperson of the DSASA. 

“With low barriers to entry, minimal risk, flexible working hours, and no formal education required, direct selling is geared to provide financial freedom to many. The direct selling income and entrepreneurial opportunity could be the solution to raising disposable income, addressing the current financial difficulties that many South Africans face,” adds Parshotam.

“Direct selling is providing an economic lifeline in SA, addressing the lack of income opportunities for youth and the unemployed. Member companies of the DSASA are providing skills and guidance to their direct sellers, enabling them to become successful entrepreneurs with sustainable businesses and financial freedom,” says Imtiaz Ebrahim, secretariat of Direct Selling Association of South Africa (DSA).

Through continuous engagement with national and provincial government departments, the DSASA has made significant progress in expanding the conversation to have direct selling acknowledged as a key economic solution by our Government. The goal is to collaborate with various levels of government to co-create a plan for economic development in townships promoting an income opportunity through DSASA member companies.

“We’re excited about sharing this wonderful opportunity of direct selling, of owning a business, and the financial freedom to afford stability, security and peace of mind,” concludes Imtiaz Ebrahim, secretariat of Direct Selling Association of South Africa (DSA).