You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Financial<br />
Education<br />
& Training In<br />
The Struggle For<br />
Economic Freedom<br />
By Thandisizwe Mgudlwa<br />
A new study has found that local consumers are struggling to make ends meet. It was recently announced by local financial<br />
experts that South African consumers experienced severe strain on their cash flow during the second quarter of this year<br />
(Q2 2012). This is evident from the MBD Credit Solutions/Bureau of Market Research (BMR) consumer financial vulnerability<br />
index (CFVI), which declined sharply from 58.9 points in the first quarter to 48.6 points in the second quarter.<br />
The CFVI measures consumer financial vulnerability according to a scale where a score of 0 indicates total consumer vulnerability<br />
while a score of 100 indicates a score of total financial security. And the decline means that consumers slipped<br />
from a ?mildly exposed? (to risks) cash flow position in Q1 2012 to being very exposed in Q2 2012. Accumulating past<br />
pressures and adverse international and domestic economic conditions have led to the cash woes of local consumers, the<br />
report also found.<br />
According to Prof Bernadene de Clercq, head of the Personal Finance Research Unit at Unisa, the mounting pressure that<br />
consumers are presently facing in trying to balance their cash flow, can be compared to the stressful conditions of 2009<br />
when they were confronted with multiple risks.<br />
These risks included job losses, high inflation and stagnating Gross Domestic product (GDP). As the correlation between<br />
the CFVI and real, seasonally adjusted and annualized GDP is 0.9, the decline in the index to very exposed implies that the<br />
economy grew at a slow pace during April, May and June 2012 says De Clercq.<br />
The prof adds: All four subcomponents of the CFVI lost ground during the second quarter. The savings index declined<br />
from 58.8 points in the first quarter to 47.5 in the second quarter; the expenditure index went from 60.1 points to 53.8; the<br />
6 �������������������������������������������