Small businesses going under
Debt Mediation Association says there is an increase in small businesses failing, due to financial strain.
CAPE TOWN - The National Debt Mediation Association on Tuesday said more than 9 million South Africans were in debt, with the number rising by almost 120, 000 between January and March 2012.
There has also been an increase in small businesses going under due to financial strain.
The Association's Magauta Mphahlele said many people were taking out personal Micro Loans to support their businesses.
However, Mphahlele said this often leads to further debt.
“Because small businesses can access normal funding, they use their own personal credit to finance their businesses; so they would either use their credit card or take a second loan against their mortgage.”
She said many small business owners are forced into making further debt.
“When the business goes down, it impacts on them individually and then they get into trouble, and that's whats happening.”
(Edited by Tamsin Wort)