South Africans are experiencing a slight financial uptick, but the middle class grapples with mounting debt, as per Eighty20’s Q4 2023 Credit Stress Report. Despite a 1% drop in loans in arrears, the credit-active population grew by 2.3% YoY, with fewer defaulting on multiple loans. However, the middle class, earning around R25 000 monthly, is heavily burdened, with new loans soaring by 9.2% in Q4. Overdue balances hit R77 billion, driven by a 2.7% rise in unsecured loan arrears. Instalment-to-income ratios stand at 47%, with the middle class dedicating 79% of income to repayments, up 28% in two years. Stagnant income against a 40% inflation rise led to higher reliance on credit cards and unsecured loans. Major banks, foreseeing credit impairments, tightened lending policies, contributing to the decline in arrears.
