My project

Pound of Flesh is a journalistic project that uses data to assess of the state of personal debt, reckless lending, and overindebtedness in South Africa – including an understanding of the debt-to-income ratio of everyday South Africans. This investigation revealed the personal equivalent of a “fiscal cliff” scenario for credit consumers, and contextualises this within broader economic data and statistics, finding that South Africa has more people who owe money than people who earn it; that almost a third of credit-active South Africans spent more than 30% of their monthly income on servicing debt; and 5.5% of South African credit consumers spend 100%+ on servicing their debt – leaving them with zero take home pay for sustaining themselves.

This project was supported by the impactAfrica fund of Code for Africa. Initially, the project planned to explore South African data about garnishees – a common and highly politicised debt collection tool. Garnishee use has been shown to further entrench indebtedness and income inequality, and is predominately used against poorer people who don’t have assets to use to recuperate unpaid debts. After the landmark 2016 Constitutional Court ruling that addressed some of the loopholes in the law around garnishee use, the decision was taken to broaden the scope of the Pound of Flesh project, and delve deep into South African consumer credit data, including an attempt to answer: How much debt are really South Africans in? What are safe levels of debt for consumers? And what does this mean for our broader economy?

Pound of Flesh is a data-driven, journalistic project – collating stories of consumer credit, and demystifying and contextualising the related data. The website (poundofflesh.org) brings together various elements from the grant – including news coverage links, personal debt stories from real consumers, and multimedia such as a social video (more multimedia elements will follow). The reporting output is initially published through independent publications, on their own platforms, and the Pound of Flesh website includes extracts and redirects readers to the original publishers. There are three long features to have come out of Pound of Flesh so far. Two of these appeared in the print and online versions of the Business Day – a daily national newspaper in South Africa – including a feature on credit growth outpacing job growth (https://www.businesslive.co.za/bd/economy/2017-09-12-indebted-consumers-on-a-credit-knife-edge/), and a look at the effect of and legality of garnishees as a debt collection tool (https://www.businesslive.co.za/bd/opinion/2017-10-12-how-garnishees-keep-gouging-debtors/). The latest is a six-page cover story package on the state of consumer credit in South Africa (as well as a look at the role of the credit regulator, and draft legislation on a potential credit amnesty currently being debated), published by the Financial Mail weekly magazine (in March 2018) and on their site (PDFs of this have been emailed to the judges).

What makes this project innovative?

Financial literacy is very poor in South Africa, and this sadly often includes journalists covering of personal financial topics. Too often new data or research in the space of personal finance is told in isolation, off the back of a press release, and with little interrogation of the numbers in those press releases that go out. There are consumer watchdog type journalists, but they tend to focus on individual cases and the legislation around those. Corporate and public finance topics get the bulk of focus from the experienced and robust financial journalists. In contrast, this series of features and stories collated several data sources, using these to contextualise what “16 million employed” or “25 million credit consumers” really means by comparing data sets and focusing on the financial health of the consumers who contribute almost 60% of the country's GDP through household consumption spend.

This series of stories (and website) explores over-indebtedness, reckless lending, debt collection practices, and the legal framework around credit provision, as well as questioning and critiquing the categories used in the “official” reporting of consumer credit statistics (from our National Credit Regulator).

It also tells a longer term story, exploring personal credit and debt trends over ten years, and casts forward through looking at relative growth rates in terms of both employment and credit consumer stats.

But critically the story works on a consumer level – demystifying jargon and taking out the “legalese” commonly seen in financial stories – and a business level, speaking to two target audiences: one that is most directly affected (credit consumers), and those at a corporate and government level who are directly involved in making decisions that affect the first group. We did this through tone of the writing, and the use of multimedia – such as a social video that focuses on the “debt spiral” that overindebtedness can trigger.

What was the impact of your project? How did you measure it?

The hard numbers around impact are still coming through. Each of the stories were “most read” for several days after publication on their respective sites, in addition to the print readership of the publications. But beyond the “eyeball” data, the stories have enjoyed traction and sparked debated on social media (primarily Twitter and Facebook) with their primary audience (credit consumers), and we understand that they were discussed behind closed doors within the governance and corporate spaces (secondary audience). The stories gave life to the data and, by bringing together disparate data sources, were able to show up glaring gaps in how personal debt is primarily characterised.

Source and methodology

This project collated a broad range of data from several sources. Chiefly, I took the publicly available information from the National Credit Regulator (including the quarterly Credit Bureau Monitor report and the Credit Consumer Report Monitor), the quarterly employment statistics from Stats SA (Quarterly Labour Force Survey) data.

I also drew information from “The Incidence of and the undesirable practices relating to garnishee orders in South Africa” (2008, 2013 update) from the University of Pretoria (http://archivedpublicwebsite.up.ac.za/sitefiles/file/47/327/2013%20garnishee%20orders%20follow%20up%20report.pdf). This document is considered the “bible” of garnishee research in South Africa. With this one, I extracted the garnishee numbers across industries into my own spreadsheet, and worked backwards from the percentages the report provides to arrive at a minimum figure of the number of people with garnishees against their debt in the South African workforce.

I also sourced figures from several annual reports (including the Credit Ombud, and the National Credit Regulator). Most financial reporting on the subject of personal finance focuses on rand (currency) value of credit categories, but here I focused on types of credit as volumes, and this changes the narrative substantially as it allows us to see what type of credit is being primarily accessed (unsecured, short term and credit facilities, rather than secured credit and mortgages). By shifting the view in this way, it removes the skewing effect that the large rand amounts involved in mortgages introduces to the figures.

Beyond the hard data, I also spoke to several credit consumers, activists in this space, and sources in the National Treasury, the National Credit Regulator, the Association of Debt Recovery Agents, and several lawyers operating in the space of consumer credit collection and credit provision.

Throughout, my approach was one of doing the legwork to bring together a very broad range of sources and voices in order to present a broader view of consumer credit, so that I could contextualise the numbers and issues for readers.


Technologies Used

The project was quite low tech in approach. I used Excel to collate data, to extract percentages and absolute volumes, and to create simple graphs and visualisations that were then redesigned by the publications’ designers in Illustrator. I used Google docs to collaborate on certain elements of the project – like the social video script. The video itself was made in Adobe After Effects and Adobe Premiere Pro, and designed in a square format as primary form, with social sharing in mind. For one of the stories, we used Infogram to map comparative garnishee laws across the world. The website was built on Wordpress, using a custom template, and it is still evolving. We will incorporate more illustrations that have been commissioned, and highlight further stories (linking back to original publication sites) through the site. The site also includes personal stories from credit consumers. The site will be used to source and house more of these personal narratives. I also used Slack to communicate with a broader team on the grant side. The project is ongoing and will grow, including a consumer credit tool and the tech around this is still being discussed.

Project members

The whole team at Code for Africa, especially Ashlin Simpson, David Lemayian, and Johnny Miller.
Rehana Rossouw (Commissioning editor at Business Day)
Malgosia Kijko (Senior producer, Business Day Online)
Rob Rose (Editor at Financial Mail)
Vuyo Singiswa (Designer at Financial Mail)
Daniel Manners (Video illustrator)

Video link

https://www.youtube.com/watch?v=ewwaE8F846c

Project owner administration

Contributor username

Followers

Click Follow to keep up with the evolution of this project:
you will receive a notification anytime the project leader updates the project page.