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Palestine Solidarity Campaign calls for release of political prisoners, including Marwan Barghouti
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Creditworthy and Misunderstood: New Data Challenges Lender Assumptions About Young Consumers
South Africa’s younger credit-eligible consumers present significant growth opportunities for lenders if they can overcome persistent market assumptions that currently shape risk appetite and acquisition strategies.
These assumptions include that younger consumers do not value credit, they are disengaged from the credit market, are irresponsible with debt, have low appetite for new credit, lack loyalty to lenders, and struggle to meet payment obligations.
They could also partly explain South Africa’s low 13% credit card market penetration among both Millennials (aged 29 to 44) and Gen Z (aged 18 to 28). Furthermore, Gen Z consumers adopt credit cards and personal loans at half the rate that Millennials did at the same age, suggesting limited growth for lenders as these consumers age.
“Our research suggests systemic barriers to credit access in South Africa, rather than a lack of demand,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “It also highlights that lenders have opportunities to innovate in product design, onboarding and education to empower these consumers to manage everyday expenses and unexpected financial needs as they progress towards achieving key life milestones.”
To challenge perceptions about younger consumers, TransUnion South Africa conducted a focused study[1] to test lenders’ perceptions, analysing participation, engagement and repayment behaviour among the country’s 4.3 million credit-active population aged 18 to 30.
Myth 1: Younger consumers don’t value credit
More than six in 10 (62%) younger consumers believe that access to credit is important to achieve their financial goals[2], with 76% saying that credit can give them access to new opportunities that could lead to a better quality of life. Younger consumers’ favourable perception of credit exceeds that of older consumers, 57% of whom believe access is important, and 71% of whom believe that access to credit can unlock new opportunities. However, less than a quarter (24%) of young consumers view credit as a risk to prudent financial management.
“Younger consumers increasingly see credit as a way to achieve their financial goals – even more so than older consumers,” Hatea said. “With most disagreeing that applying for credit signals poor financial management, it’s clear that opportunities exist for segment-focused products supported by financial literacy initiatives.”
Myth 2: Younger consumers are disengaged and don’t participate in the credit market
Nearly four in 10 (39%) young consumers feel that they have sufficient access to credit and lending products, with 49% believing that they would be approved for a credit product if they needed one.
It’s worth noting that, over time, consumers’ choice of credit product shifts. Reviewing credit card originations across a six-year period showed similar trends across time: 2% of 18 year old credit active consumers hold a credit card, compared to 19% of 30 year olds. Their participation in secured credit products increases with age, reaching parity with the general population by 30 and reflecting life stage realities like income, affordability and asset ownership, rather than disengagement.
“These shifts show that young consumers are engaged with the credit market, particularly with unsecured products, but their participation evolves across product types and life stages,” Hatea said.
Myth 3: Younger consumers are irresponsible in leveraging debt
Credit utilisation and average balances are well aligned with risk-based access that improves with age. At age 21, 95% of consumers are classified as subprime, dropping to 74% by age 30, reflecting a maturing credit profile.
Despite limited access, younger borrowers demonstrate measured usage: the average credit card balance at age 21 is R11,000, rising to R24,000 by age 30, while utilisation among near-prime consumers increases from 58% to 78% over the same age range.
“These trends highlight responsible engagement with credit and clearly refute the myth that younger consumers overextend their credit exposure, or are reckless with credit,” Hatea said. “As young consumers gain access to larger loan amounts, they move into better risk categories, reflecting greater lender trust in recognition of responsible repayment behaviour.”
Myth 4: Younger consumers have a low appetite for credit, and lack loyalty to lenders
While one third (33%) of the general population intends to apply for new credit within the next year, this increases to 45% for Gen Z consumers. Additionally, 36% of these consumers inquired about new credit over the six years studies, compared to 28% of all consumers. However, only 3.4% of younger consumers return to their first lender for new credit – similar to the 3.6% average across all consumers.
“The data shows that younger consumers do indeed have appetite for credit, while revealing that South African consumers in general are not particularly loyal to their credit providers,” Hatea said. “To build loyalty and retain younger consumers, lenders should invest in early-stage experiences, personalised engagement, and relevant products that build lasting relationships.”
Myth 5: Younger consumes struggle to keep up with their payment obligations
Interestingly, younger consumers show significantly lower risk of delinquency at 30 days past due (DPD) in the first year after opening credit cards, although this rises as they get older: there was a 17% delinquency rate among near prime 18 to 22 year olds, while 30 year olds displayed a 24% delinquency rate.
However, for non-bank loans and bank loans, younger consumers (18 to 24 years old) show slightly higher delinquency rates than older consumers, although younger consumers, especially those aged 23 to 25, perform better than the industry average. This indicates that lender type influences delinquency outcomes, and that younger borrowers may respond differently to the structure, support, or perception of a lender’s credit.
“Younger consumers are effectively managing their loans when compared to industry averages across most products,” said Hatea. “They’re not broadly higher risk, but they may be more vulnerable in certain lending contexts, particularly non-bank personal loans, where product design, support, or affordability may not be well aligned to their needs. Higher delinquency rates on non-bank personal loans can be addressed through early default detection tools.
“By focusing on education, wallet growth, loyalty, alternative data to measure risk, and proactive risk management, lenders can support younger consumers and drive long-term, sustainable growth among these consumers and in the broader credit market,” she said. “Well-managed credit can also be a catalyst for broader economic growth in South Africa.”
[1] TransUnion South Africa conducted a focused study to test lenders’ perceptions of consumers aged 18 to 30, analysing participation, engagement and repayment behaviour among the country’s credit-active population in this age group. Data was studied across four time frames (September in 2018, 2022, 2023 and 2024), and included age, risk score, open products in wallet, credit lines, average balances by product and credit utilisation at commencement of the study, new products opened, line assignments and opening loan amounts for six months, and delinquency rates on newly opened products for 12 months. These were compared to overall market averages to evaluate gaps and opportunities.
[2] According to TransUnion’s Q2 2025 Consumer Pulse Survey of 922 adults aged 18 or older, residing in South Africa conducted May 5–25, 2025 by TransUnion in partnership with third-party research provider, Dynata.
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TransUnion Study Reveals Key Insights Into South Africa’s FinTech Borrowers as Market Poised for Growth
- TransUnion analysis reveals actionable insights for FinTech lenders seeking to navigate market complexities to achieve growth targets
- FinTech lending is not the main gateway to financial inclusion, with most consumers choosing a clothing account as their first credit product
- FinTech borrowers are loyal when it comes to subsequent products, but FinTech lenders are lower in consumers’ payment hierarchy than other lender types
TransUnion’s latest research into South Africa’s FinTech lending market reveals critical insights into borrower behaviour, loyalty and risk based on an analysis of 4.3 million South Africa consumers. The study highlights patterns that present both opportunities and challenges when navigating a rapidly digitising credit ecosystem.
South Africa’s FinTech sector is undergoing rapid transformation, signalling a major shift in how consumers will engage with credit in the next five years, and beyond. As digital adoption accelerates, lenders will need to adapt their approach to South African consumers if they’re to attract, retain and grow relationships with digitally engaged borrowers.
Emerging FinTechs are offering diverse solutions such as buy now, pay later (BNPL) loans with interest free payments, flexible financing for small and medium enterprises, point-of-sale credit and insurance coverage. Financial services are now more accessible than ever before. However, it’s essential that the lenders behind these solutions understand who is using them, how they engage with credit, and whether borrowers’ loyalty can help drive sustainable growth.
“As competition intensifies and regulatory frameworks evolve, lenders must go beyond product innovation and develop a deeper understanding of consumer behaviour,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “Our study offers a data-driven lens into the FinTech borrower profile, helping lenders build loyalty, manage risk, and drive inclusion.”
TransUnion analysed South Africans who held at least one open FinTech credit obligation in Q4 2024, including long-term personal loans, short-term personal loans and credit cards, to learn more about the consumers driving growth in the sector. The study examined risk profiles, delinquency trends, product breadth, and loyalty patterns among FinTech borrowers. Further, the study compared those characteristics to similar-risk consumers using traditional lender products only (non-FinTech borrowers[1]), providing a deeper understanding of growth opportunities for South Africa’s credit market.
Five Themes Shaping FinTech Lending Strategy
1. FinTechs are not yet the main gateway to financial inclusion.
Despite South Africa’s high mobile penetration[2], 69% of New-to-Credit consumers – those with no prior reported credit history – enter the market via retail accounts, with clothing accounts being the most common first product. FinTechs have an opportunity to reposition themselves as enablers of financial inclusion by partnering with retailers and mobile ecosystems to reach underserved segments.
2. FinTech borrowers are concentrated in below prime risk tiers[3].
While many FinTech borrowers have experience managing credit, 95% of FinTech borrowers with 0–1 month loans are in below prime risk tiers, compared to 29% for bank borrowers and 69% for non-bank lender borrowers. For 2–12 month loans, 94% of FinTech borrowers are below prime, in contrast to 58% for banks and 50% for non-banks. This highlights greater risk exposure among the FinTech borrower base and suggests that FinTech lenders could benefit from leveraging trended and alternative data to better predict repayment risk and reduce delinquency rates, particularly among below-prime borrowers.
3. FinTech borrowers are not all underserved.
Among 0–1 month term borrowers, 44% of FinTech consumers already hold two or three credit products and 27% hold four or more, debunking the assumption that FinTech borrowers have limited access to credit. Additionally, more than 56% of FinTech personal loan borrowers hold credit products with non-FinTech lenders. These multi-lender relationships underscore the need for lenders to view borrowing patterns holistically and better understand the reasons why borrowers may be seeking credit from different lender types, in order to develop strategies for capturing more of their customers’ wallets.
4. FinTech borrowers underperform on repayments.
While there are no material differences by lender type for longer-term loans, there are significant differences for 0-1 month loans. This is an important consideration as these shorter-term loans are more likely to be used by borrowers earlier in their credit journeys when they are potentially more financially vulnerable. After controlling for borrower risk score, delinquency rates (consumers 2+ months in arrears on a loan) were highest among FinTech borrowers: The consumer-level delinquencies were 74% for 0–1 month loans from FinTechs compared to lower rates for bank loans (53%) and non-bank lender loans (53%), underscoring the need for enhanced risk management strategies tailored to the FinTech segment.
5. FinTech borrowers are loyal to FinTech lenders
TransUnion’s research provides compelling evidence of borrower loyalty within the FinTech lending ecosystem. Among consumers who originated a 0–1 month personal loan, 65% opened another 0–1 month loan within 12 months, and 93% of those chose a FinTech lender. More than one fifth (21%) of these borrowers progressed to a 2–12 month loan, with 80% remaining with FinTech providers.
Among consumers who started with a 2–12 month personal loan, 95% opened another 2–12 month loan, with 60% choosing a FinTech lender. In addition, 85% of these borrowers also opened a 0–1 month loan, and 38% did so with FinTech lenders. These patterns demonstrate a strong preference among borrowers to remain within the FinTech category, even as they take loans over longer time periods. This loyalty presents a strategic opportunity for FinTech lenders to deepen relationships through personalised engagement, targeted product offerings, and proactive risk management.
However, loyalty in product originations does not necessarily translate into repayment prioritisation. When consumers hold loans with both FinTech and non-FinTech lenders, they tend to prioritise repayments to traditional institutions. Among consumers with 2–12 term personal loans from both FinTech and non-FinTech non-bank lenders, delinquency measured as 1+ month in arrears was 33% for FinTechs, compared to 26% for non-FinTech non-bank lenders. Similarly, for those with loans from both FinTechs and banks, delinquency was 30% for FinTechs versus 28% for banks.
The takeaway for lenders is that while FinTech borrowers are loyal in terms of repeat borrowing, they may deprioritise FinTech repayments when under financial pressure. This highlights the need for FinTech lenders to strengthen their engagement strategies, build trust, and implement early intervention tools to improve repayment outcomes and long-term value.
“If lenders are to benefit from the anticipated growth in the FinTech lending market, it’s essential that they offer financial literacy and awareness education to help consumers understand how responsible credit use can support their financial goals. Once consumers have opened FinTech-issued products, lenders can activate lifestyle triggers to anticipate consumer progression so that they can deliver timely, relevant engagement to drive loyalty and long-term value. This can be further supported by deploying predelinquency models to identify early signs of consumer stress, and to initiate recovery efforts before risk escalates,” said Hatea.
[1] FinTech consumers were those with an open FinTech long-term personal loan, short-term personal loan, or credit card. Non-FinTech consumers were a control group with no FinTech obligations of any type in their history, who held a long-term personal loan, short term personal loan or credit card from a non-FinTech lender
[2] 118,600,000 connections across 60,690,000 people https://datareportal.com/reports/digital-2024-south-africa
[3] Scores are based on TransUnion’s CreditVision® generic scoring methodology. Risk distribution key: subprime (0-625), near prime (626-655), prime (656-695), prime plus (696-720), super prime (721-999).
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Police Crime Statistics Cannot Be Taken Seriously
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The post Police crime statistics cannot be taken seriously appeared first on Freedom Front Plus.
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The post Freedom Front Plus mediates talks between Tshwane and Kleinfontein appeared first on Freedom Front Plus.
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The post HERRON: “LAND & BUILDING OCCUPATIONS: TWO-TRACK SYSTEM PROTECTS HISTORIC INEQUALITY” appeared first on For Good.
Three Simple Ways to Become Credit-Smart
Understanding your credit score isn’t just for people taking out big loans or mortgages, it impacts everyday financial opportunities. A healthy credit score can help you qualify for better intertest rates, faster approvals, and stronger protection against fraud by regularly checking your report. Learning how credit works – and sharing that knowledge – is one of the most powerful financial gifts you can give.
Why Knowing Your Credit Score Matters
Traditionally, your credit score is a snapshot of how well you have managed credit and debt in the past, based on the information in your credit report. Lenders, landlords, insurers, and even employers sometimes use it (or check related credit data) to assess risk. If your score is strong, you could qualify for better interest rates or favourable credit terms. But if it’s weak or contains errors, you might end up paying more or having applications declined.
But it’s not just about access. Reviewing your own credit report gives you valuable insight into your financial history. It shows you what accounts are open, whether payments were missed, and if any accounts were opened fraudulently in your name. That kind of awareness helps you move from being passive to active in managing your financial life.
This shift is already visible in South Africa. According to TransUnion’s Q3 2025 Consumer Pulse Study, 35% of respondents checked their credit report for signs of fraudulent activity, while 51% did so to improve their credit score.
Fatgie Adams, Head of Credit Risk Solutions at TransUnion, explains: “Understanding your credit report and score is one of the simplest yet most powerful ways to take control of your financial future.”
Given that many South Africans expect to apply for or refinance credit in the coming year (about 37%, according to the same study), knowing where you stand becomes even more critical.
Three Simple Ways to Understand Your Credit Score
Understanding your credit score doesn’t require fancy tools or technical knowledge. Here are three clear, practical steps to help you take charge:
1. Go Through Your Credit Report
Start by accessing your credit report, many credit bureaus or services offer free or low-cost access. Review the main sections carefully:
- Active accounts: Which credit lines or loans are currently open?
- Payment history: Were payments made on time, or were any missed?
- Credit inquiries: Who has recently requested access to your credit information?
- Balances vs. limits: How much of your available credit are you using?
Going through each section helps you spot errors (for example, an unexpected account) or identify areas for improvement. This simple exercise turns your credit score from a mystery number into a tool you can understand and manage.
2. Understand How Everyday Habits Affect Your Score
Many people assume a credit score is fixed, but it changes over time, and many factors are within your control:
- Pay on time: Late or missed payments often have the biggest negative impact.
- Use credit conservatively: Using less than 30% of your available credit generally helps your score.
- Avoid multiple new credit lines at once: Too many recent applications can signal risk to lenders.
- Be consistent: A steady, predictable credit history is viewed more favourably than big fluctuations.
3. Review Regularly to Catch Fraud or Changes Early
Credit monitoring isn’t just about improving your score it’s also a defence against fraud. Make it a habit to:
- Check your credit report every few months, or before major financial decisions.
- Look for new accounts you didn’t open.
- Check for unfamiliar credit enquiries.
- Compare balances against known credit limits.
- Dispute any suspicious entries promptly.
Treat reviewing your credit report as a financial hygiene routine, one that helps you catch issues early before they escalate. Adams adds: “Reviewing your credit report data regularly helps you see how daily decisions affect your score. That visibility lets you catch issues before they become serious.”
Why This Matters Beyond Individuals
Many South Africans continue to face challenges accessing formal credit and quality financial services. Traditional systems often feel exclusive, especially for underserved individuals and small businesses, because formal credit systems rely heavily on past borrowing behaviour as the main measure of creditworthiness.
According to TransUnion’s CreditVision® Telco Data Score modelling, over 1.4 million credit-invisible South Africans open new credit accounts each year, contributing to more than four million new accounts over the past three years. Yet traditional scoring models frequently fail to assess these consumers accurately, leaving over 16 million adults outside the formal credit system. Successfully integrating these and other excluded consumers into the economy could contribute an estimated R173 billion to South Africa’s GDP.
TransUnion is shifting the paradigm by embracing alternative data and developing new scoring models for example, using utility or mobile payment patterns (with user consent) to ensure that individuals who were once unclassifiable can now be assessed fairly and accurately. Its “Be the Reason Things Change” campaign responds to this need by equipping the public with practical tools, credit education, and the confidence to take charge of their financial futures.
“Greater credit visibility and education can lead to fairer interest rates, fewer surprises in loan applications, and stronger trust in financial systems,” says Adams. “When more people are credit-aware, lenders and markets work better too. Credit education is not a niche luxury; it’s a critical tool for building financial resilience and inclusion.”
Boost for ECD and Informal Trade
Today, the Tshwane Department of Economic Development and Spatial Planning, under the political leadership of GOOD’s Councillor Sarah Mabotsa, has brought two important reports to Council for approval.
The post GOOD WELCOMES BOOST FOR ECD AND INFORMAL TRADE appeared first on For Good.
Helping Namakwa Residents Gain Access to Brazil for the Holidays
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The post VF Plus wants to help Namakwa residents gain access to Brazil for the holidays appeared first on Freedom Front Plus.
Disability Organisation Loses Constantia Land Claim Battle
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Cape Town’s Crime Crisis: Why Is Tshwane Taking Advice From the Most Dangerous Metro?
In addressing the scourge of GBVF and crime, we must not be blind to the hard facts. There is no denying that South Africa has a great deal of challenges when it comes to both public safety and safety in the home.
The post CAPE TOWN’S CRIME CRISIS: WHY IS TSHWANE TAKING ADVICE FROM THE MOST DANGEROUS METRO? appeared first on For Good.
Release of Useful Health Statistics: 2015 to 2025
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Fort Hare’s Cattle Projects Were Supposed to Help Eastern Cape Farmers. Instead They Are a Lesson in Bad Governance
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