One-third of consumers worry about loan default
Mbongeni Mguni | Monday July 24, 2023 06:00
TransUnion and its research partner, Dynata, surveyed 401 adults residing in Botswana between May 5 and 22 using an online research panel method across a combination of desktop, mobile and tablet devices.
To increase representativeness across demographics, the survey included quotas to balance responses across dimensions such as age, gender, household income, and region.
The survey, first done in the third quarter of last year, represents the sole available sampling of local consumers’ current and forecast financial health.
TransUnion researchers found that the proportion of consumers concerned about servicing their bills and loans rose by four percentage points between the third quarter of last year and the second quarter of this year.
“To meet their financial obligations, consumers employed a range of tactics,” the researchers noted. “Overall, 41% planned to make partial payments, while 28% planned to dip into their savings. “A further 24% planned to rely on the help of friends or family members through borrowing. “These findings reveal individuals’ diverse strategies for handling financial stress and emphasise the importance of having a varied toolkit for managing personal finances.”
Between April and June, 37% of those surveyed witnessed an increase in household incomes, while 25% experienced a decrease, and the remaining 38% observed no change.
“Such variations highlight the impact of economic conditions and personal circumstances on the financial situation in Botswana,” the survey’s researchers said. “Those who experienced an increase in their incomes attributed it to various reasons with new business ventures cited the most at 22% followed by increased salary at 20% and found new employment at 14%. “Conversely, job loss was the primary cause of decreased incomes, highlighting the significance of employment stability for households’ financial well-being.”
The survey found that between April and June, about two-thirds of respondents had cut back on discretionary spending such as on dining out, travel, and entertainment, while 35% cut subscriptions and memberships.
Looking toward the future, respondents projected various adjustments to their household spending in the next quarter covering the period between July and September. While 38% anticipated increased bills and loans, and 53% expected a continued decline in discretionary spending, 45% intended to augment their retirement and investment contributions, showcasing a long-term financial perspective amidst current pressures.
Still, three-quarters of the consumers surveyed remained optimistic their incomes would increase in the next year.