According to the Eighty20’s Q3 2023 Credit Stress Report, South Africa has witnessed concerning trends in credit usage, with over 800 000 new entrants into the credit market in since Q4 of 2022, exacerbating the debt burden on more than 18 million consumers. This surge coincided with a rise in defaulted loans, including credit cards, vehicle and asset finance and home loans. While lenders tightened lending criteria in response, the annual change in default rates remained high, steadily increasing since Q1 2022. The Experian Consumer Default Index for Q3 2023 reported a 32% increase in consumer debt default compared to the previous year, with the rate climbing from 3.69 to 4.88. Additionally, credit card growth slightly increased from 9% in October 2023 to 9.1% in November 2023. This crisis reflects a broader cost-of-living challenge driven by economic weakness, limited income growth, high inflation and soaring living costs, affecting households across all income brackets.
