Debt-related civil cases drop amid muted economic growth

National statistics agency of South Africa reports a decline in debt-related civil judgments and summonses in late 2023, signalling financial relief for citizens in a challenging economy. 

StatsSA has revealed that the data for civil judgments for debt in the last three months of 2023 has decreased by 5.6% to 9 327 from 11 899. This paints a hopeful picture, as most households have been financial squeezed by high inflation and interest rates.  

Graph showing trend of judgments | Statistics South Africa

The data released this past Tuesday has also revealed that the number of civil summonses issued for debt decreased by 15%, from 42 592 to 33 186 in the last quarter of 2023, in contrast to the same period in 2022. The issuing of summons refers to the process whereby a party institutes proceedings in a court of law to sue another party for outstanding monies. 

Additionally, the number of civil judgements handed down also decreased by 4,3% in the same period. The largest contributor to both these decreases comes from a downturn in instances where money lent had been left unpaid. 

Graph showing trend of civil summonses | Statistics South Africa

Though the number of actual proceedings had decreased, the value of the judgments handed down increased by 9.2%, with January 2024 specifically amounting to more than R269 million, of which the claiming of money lent takes up nearly a third.  

Positively, January 2024 has recorded less civil judgments being handed down in comparison to January 2023, showing a decrease of nearly R10 million in amounts claimed.  

This publication comes soon after the release of Eighty20’s credit stress report, which indicated that nearly half of the net income for all South Africans is allocated to debt servicing costs. 

The fourth quarter report continuing to state that while unemployment and inflation crept up slightly, there was a full percentage point decrease in arrear loans, potentially contributing to the decrease in summons issued.