Read the BusinessTech article here: South Africa’s richest people are drowning in debt

This quarter saw divergent signals for consumer pressure, with declines in petrol prices alongside improvements in inflation and consumer confidence, coupled with the strongest YoY growth in loan numbers and balances since Covid.  However, the overdue balance for some loan products has seen significant increase, with the growth in home loan and credit card overdue balances particularly concerning. There was also an increase in the number of defaulting loans for the first time since early 2023.

Every Quarter, Eighty20, in collaboration with Xpert Decision Systems (XDS), releases a Credit Stress Report.  The 2025 Q2 Credit Stress Report examines consumer credit behaviour and the key economic events that shaped the second quarter’s landscape.

Download the Credit Stress Report

Economic Context and Global Uncertainties

Quarter two saw an escalation in geo-political tensions with ongoing, and at times escalated, conflict in both the Middle East and Ukraine. President Trump’s tariff policies have also fostered uncertainty and created volatility in global markets.  While inflation fell to its lowest level since Covid, and there were positive movements in petrol prices and consumer confidence, unemployment increased along with overdue balances and defaults. This report examines how the second quarter unfolded against this backdrop.

The Bureau for Economic Research (BER) further revised their 2025 real GDP growth forecasts downward to 1.1%, due to global economic uncertainty.

 

Credit Market Dynamics

• The credit market continued expanding, and this quarter saw the largest YoY growth in loan balances and number of loans since Covid. The number of outstanding bank and retail loans rose by 3.5%. The quarter also saw 2% growth in the number of credit active individuals.  
• Of the increase in loan products for the quarter 14% were credit card, 42% were unsecured and 20% were retail loans.
• Total loan balances stood at nearly R2.6 trillion, representing a R143 billion increase (5.8% YoY). Retail loan, credit card and home loan balances drove this growth, each expanding by nearly 7% YoY.
• Total overdue balances climbed to nearly R215 billion – a R22 billion annual increase representing 8.3% of total outstanding debt.
• Concerningly, overdue balances have seen a significant increase YoY – most predominantly in home loan (17.9%) and credit card (7%) portfolios.
• The growth in home loan and credit card outstanding balances suggests consumers are drawing more heavily on these existing credit lines.
• The number of home loans and vehicle asset finance products have seen a reduction YoY of 1.7% and 2.1% respectively. This could be indicative of the market segment who typically qualify for these products, opting not to open new credit lines for these products at this time.
• This quarter saw the first growth in the number of loans in default (337 000 loans) since early 2023.

New to Credit

Third-quarter developments present multiple headwinds: worrying inflation trends and ongoing geopolitical instability. Of particular concern is the growing concentration of credit exposure and overdue balances within specific consumer segments. Our continued analysis will track how these converging factors shape credit market dynamics and consumer behaviour for the balance of 2025.

• There was an uptick in new to credit activity this quarter with 740 000 new to credit individuals, a 4.8% QoQ increase. There were 900 000 loans taken out by new to credit consumers this quarter, giving rise to an increase in the loan balance of new to credit individuals by 8.3% QoQ to R5.2bn.
• Retail and unsecured debt remain the most common entry points into the credit market.

Looking Forward

Third-quarter developments present multiple headwinds: worrying inflation trends and ongoing geopolitical instability. Of particular concern is the growing concentration of credit exposure and overdue balances within specific consumer segments. Our continued analysis will track how these converging factors shape credit market dynamics and consumer behaviour for the balance of 2025.

Download the Credit Stress Report

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