However, many of these foreign nationals are facing significant obstacles when it comes to securing loans, according to financial platform Justmoney.co.za.

Erica Liebenberg, a Spokesperson for Justmoney, explained that one of the main issues lies in the country’s strict regulations and complicated documentation processes. Unlike SA citizens, foreign nationals typically don’t have an ID book, which makes proving their identity and financial standing more difficult. Instead, they must rely on passports and work or residency permits, which can create additional complications.

On top of that, many foreign nationals don’t have a credit history in SA, which leaves lenders with little to go on when determining whether someone is creditworthy. The process is further complicated by the need for documents from their home countries, which may need to be translated, adding another layer of bureaucracy to the already complex application process.

A key concern for lenders is the uncertainty around whether foreign nationals will remain in the country long enough to pay back their loans. If someone is on a temporary work or residency visa, there’s the risk that it could expire before the loan is repaid. This is a particular worry when it comes to long-term loans, such as home loans, where the repayment period can stretch for decades.

Despite these challenges, Liebenberg pointed out that foreign nationals are a positive force in the SA economy. Economic data suggests that their presence leads to a rise in wages for local workers, with some studies showing an annual wage increase of up to 5% for native South Africans.

--ChannelAfrica--