The index, released on Thursday, 15 April 2010, shows that consumer financial vulnerability, after first increasing in the third quarter of 2009, has now declined for two consecutive quarters as the economy picked up momentum and consumers adapted their lifestyles downwards.
Although the CFVI score improved from a high of 5.48 in the third quarter of 2009 to 4.66 in the first quarter of this year it is evident that South Africans remain at risk, the BMR and FinMark said.
Continuing job losses are leaving more people in the R30 000 to R100 000 a year income bracket financially vulnerable, according to the latest results.
Although the rate of job losses declined towards the end of 2009 and in the first quarter of 2010, the number of people losing jobs is putting more consumers at risk.
Consumers are also at risk due to the prices of some goods and services, such as food, housing and utilities, medical services, transport and education, growing faster than household incomes during 2009, the survey showed.
Other indications of continued financial stress are the increasing number of consumers making arrangements to pay off their debt over a longer period or cancelling policies to cover household expenditures, the BMR and FinMark said.
The index showed that savings vulnerability declined from the fourth quarter of 2009 to the first quarter of 2010 as consumers adapted lifestyles downwards and entered into fewer credit agreements enabling them to save more.
Expenditure vulnerability, which depends on various factors including whether consumers are able to deal with rising costs such as food and transport or are able to live within their means, showed a continuing decline from the second quarter through to the fourth quarter of 2009, followed by a slight increase during the first quarter of 2010.
Debt servicing vulnerability and income vulnerability rates increased from the second to the third quarter of 2009 but declined from the fourth quarter of 2009 to the first quarter of 2010.
Lower income vulnerability, which relates to job and income security, could be attributed to a decline in the rate of job losses towards the end of 2009 and in the first quarter of 2010.
Lower levels of debt servicing vulnerability could be the result of both lower interest rates and lower credit-acquisition rates among consumers, they said.
Key respondents were asked which of the broad income groups they consider the most vulnerable. In the second quarter of 2009, 13.8% of respondents indicated that people who earn between R30 000 and R100 000 are the most vulnerable, and this increased to 46.4% in the first quarter of 2010.
As economic growth improves in 2010, coupled with higher levels of job creation, lower levels of consumer financial vulnerability are expected.
However, no significant decline in vulnerability is expected in the near future as the underlying causes - high levels of unemployment and poverty, low skills levels, low labour market absorption rates, high levels of indebtedness and defaults on repayments, ineffective service delivery, and the impact of HIV and Aids - remain mainly unaddressed, they said.
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