Many South Africans are shackled by debt and do not know how to free themselves from this burden. And this is why Smangele Semenya started her company, Debt Clearance Agency, in 2018.
Her company specialises in debt clearance, credit score upgrading, debt review removal, debt mediation, judgment removal, fraud alert removal, adverse listing removal, debt restructuring, and credit history updating. Semenya, who has a Diploma in Business Management, told Vutivi News that she spent some years working in the debt and credit sector before branching out on her own.
“When I started my business, I saw that what causes people to be in debt is that they don’t get proper consultation while applying for debt, and they are failing to manage their debt,” she said. “I also realised that almost half of the credit-active consumers have an impaired credit record and to some degree need legal help to improve their credit standing.”
Semenya said the aim of her company was to help her clients attain financial freedom.
“As a debt counsellor accredited by the National Credit Regulator, I can negotiate settlement discounts for consumers who want to settle their accounts, and also reduce monthly installments for clients who are heavily burdened by debt and are unable to cover their monthly expenses,” she explained. “I grew up in a business environment, and that is where I learned how to be professional and honest, traits which are crucial in my line of work.”
Semenya said that because many people had been scammed by counterfeit debt counsellors, she often had a difficult time convincing her prospective clients that her agency was legitimate when she started out.
“I overcame that by being honest to my clients. I tell them whether I’ll be able to help them or not,” she said. “I don’t take the money and run away when I know that I won’t be able to help my client because, for me, money is not at the forefront of my business.”
Semenya said she also paid clients R500 for a referral. Ultimately, her long-term goal is to help people be savvy about how they spend their money.
“If we are able to spend our money wisely and manage our debt, we will be able to accumulate assets which will not only help us, but our communities in the long run,” she said. According to Joseph Phiri, who is a financial planner at Alexander Forbes, South Africans were currently spending around three-quarters of their take-home pay on debt, and only had a quarter of their salaries to spend on everything else.
Before 1994, debt to disposable income for South African households was less than 60%.
Financial experts have warned that this situation may worsen if interest rates rise because people will have to spend more on paying off their debt.