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Media Info
 SA banks rethink repossession strategy
23 February 2009
Johannesburg - Banks are repossessing fewer houses and cars, debt counselling organisation Consumer Assist said on Monday.
"Banks, which at one stage were repossessing 10 to 20 houses are now rethinking that strategy because they have realised that unoccupied houses don't sell quickly because of the property slump and thieves soon strip them bare," said chief executive officer Andre Snyman.
He said banks were allowing home-owners to remain in their dwellings and were renegotiating payment terms - "which is what they should have done in the first instance".
There had also been a reported slowing in vehicle repossessions because banks were unable to sell the cars they were repossessing.
A drop of 1.5 percent in interest rates since December 2008 was also relieving pressure on bond and vehicle repayments, Snyman said.
He added that the total number of civil summonses issued for debt in 2008 decreased by 4.4 percent compared with 2007 according to Stats SA's most recent report.
However, there was an increase of 2.6 percent in the fourth quarter of 2008 compared with the fourth quarter of 2007.
Stats SA said the major contributors to the decrease in civil summonses issued for debt in 2008 compared with 2007 were civil summonses issued in respect of money lent (-5.5 percentage points), other services (-0.8 of a percentage point) and promissory notes and other acknowledgements of debt (-0.5 of a percentage point).
He said this did not mean there was less debt.
"What it means is that more people are going to debt counsellors to help them out of bad debt, while others are becoming far more careful of how they spend and are trying to pay off outstanding debt." - Sapa
FOR FURTHER INFORMATION www.consumerassist.co.za 0861 21 22 23 debt counselling call centre
Andre Snyman - CEO - Consumer Assist
aurelia.espag@consumerassist.co.za / 011 654 6018 (Languages: English, Afrikaans)
Source: Business Report
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