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MTBPS: Economic and Fiscal Realities Addressed, ANC’s Service Delivery Failure Acknowledged

Location: News

The Medium-Term Budget Policy Statement (MTBPS) delivered by the Minister of Finance, Enoch Godongwana, addressed the country’s economic realities, which have changed drastically since the budget was tabled in February, primarily as a result of the international oil price shock. These realities entail lower-than-projected economic growth, higher-than-projected inflation and poor service delivery. The cost of […]

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Senior DA Strategist Should Be Dismissed

Location: News

While relations between South Africa and the United States (US) are balanced on a knife-edge, the DA’s chief strategist, Ryan Coetzee, fanned the flames of the ANC’s anti-American sentiments by sharply criticising the US and Western values in general. In response to an important speech by the US Secretary of State, Marco Rubio, on 7 […]

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Affordability Reshapes South Africa’s Credit Market in Q2 2026

Location: Business
  • Retail credit originations declined across clothing, revolving and instalment products, with each segment showing increasingly distinct consumer behaviours
  • Despite significant growth in new vehicle sales during the quarter, vehicle asset finance growth slowed as consumers shifted focus to long-term affordability rather than simply accessing credit
  • Bank and non-bank personal loan markets continued to grow, with distinct performance outcomes

As many South Africans continue to feel the pressure of rising living costs, affordability is affecting popular credit products in diverse ways as consumers adapt their borrowing strategies rather than stepping away from credit altogether. The latest TransUnion Q2 2026 South Africa Industry Insights Report shows that households are becoming more selective about how they borrow, with consumers prioritising products that align with their needs while carefully managing affordability.

Acquisition Slowed as Portfolio Outcomes Diverged

Growth in retail credit originations (new accounts opened) declined across all major retail lending products during the quarter. New clothing accounts fell 7.8% year-over-year (YoY), retail instalment originations declined 10.3%, and retail revolving originations decreased 12.2%.

While all three credit products experienced lower new account volumes, the underlying customer and portfolio trends across these products tell very different stories.

Despite new account acquisition falling significantly, the clothing account portfolio continued to demonstrate stability, supported by existing customer relationships. Total credit lines increased by 12.4% YoY, outpacing balance growth of 8.0% YoY. This may reflect ongoing line management among existing customers, while the slower increase in balances suggests that consumers are using the additional capacity selectively, using only the credit they need to support day-to-day consumption in a challenging economic environment.

Clothing account performance improved slightly, with serious account-level delinquency (3+ months in arrears, or MIA) decreasing by eight basis points (bps) YoY to 26.5%. However, balance-level delinquency deteriorated by 67 bps, suggesting that repayment pressure is becoming more concentrated among customers carrying larger balances.

The retail revolving credit segment followed a different trajectory. Account volumes declined by 4.5%, the number of active consumers fell 4.4% YoY and outstanding balances decreased 1.9% YoY, indicating continued market contraction. Despite weaker acquisition (origination volumes dropped by 12.2% YoY) and lower participation, performance improved materially, with account-level delinquencies improving by 135 bps YoY to 16.0%. These trends suggest that while the portfolio may be shrinking in size, quality has improved, as tighter lending and portfolio rationalisation have yielded a more resilient borrower base.

Retail instalment lending presented yet another picture. Origination volumes declined by 10.3% YoY and the number of consumers carrying balances fell by 13.9% YoY, yet outstanding balances increased by 12.0% YoY and average balances rose by 9.8% YoY. Serious delinquency deteriorated across all measures: account-level delinquency increased by 146 bps, with similar deterioration for consumer-level and balance level delinquency, pointing to mounting repayment pressure among remaining borrowers.

For lenders, the combination of fewer consumers, higher average balances and broad-based delinquency deterioration reinforces the need to assess affordability carefully at origination and monitor existing portfolios closely for emerging signs of stress, particularly among retail instalment customers.

These trends align with findings from TransUnion’s Q2 2026 Consumer Pulse Study which showed that 52.7% of consumers said that they had cut discretionary spending in recent months, while nearly two thirds (63.4%) said that they actively sought sales and discounts when shopping, to make ends meet.

“South Africa’s retail credit market continued to fragment during the quarter under review, with clothing, retail revolving and instalment lending following increasingly different trajectories,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “While all three products experienced lower origination activity, the underlying performance and portfolio trends suggest consumers are becoming more selective in how they use retail credit and lenders are responding differently across product types. As a result, retail credit can no longer be viewed as a single market, but rather as a collection of products serving distinct consumer needs and risk profiles, each of which may be experiencing varying levels of financial strain or resilience.”

Consumers’ Mobility Choices Influenced by Long-Term Affordability

Despite new passenger vehicle sales increasing strongly during Q2 2026 according to TransUnion’s Q2 2026 Mobility Insights Report, the vehicle finance market recorded modest growth in Q2 2026, continuing to demonstrate demand despite a more challenging affordability environment. Outstanding balances increased 8.0% YoY, supported by a 5.5% YoY increase in average new loan values, while origination volumes grew modestly by 1.1% YoY. Importantly, credit performance continued to improve, with serious account-level delinquencies decreased by 115 bps, indicating that growth continues to be accompanied by relatively strong portfolio performance.

This resilience is particularly noteworthy given shifts occurring elsewhere in the automotive market. According to the Mobility Insights Report, vehicle purchase intentions softened during Q2 2026, particularly among lower- and middle-income consumers. Affordability, financing costs, fuel efficiency and total cost of ownership have become increasingly important considerations in vehicle selection.

At the same time, consumers showed growing interest in technologies that could reduce long-term ownership costs, with hybrid vehicles emerging as an increasingly attractive alternative for consumers focused on fuel efficiency and operating costs. These developments suggest that demand is being reshaped by more value and affordability considerations, rather than disappearing altogether.

“Consumers are increasingly evaluating not only whether they can finance a vehicle, but also whether they can comfortably own and operate it over the longer term. This shift is likely to influence vehicle choice, financing structures and portfolio composition as the market continues to evolve,” said Hatea.

“Affordability pressures appear to be changing the structure of demand rather than reducing participation in the market. Consumers remain interested in mobility solutions but are becoming more selective about how their needs are met. Lenders that can balance access, affordability and risk management are likely to be best positioned to support sustainable growth in the vehicle finance market,” she added.

Personal Loan Trends Continued to Diverge

South Africa’s personal loan market continued to expand during Q2 2026, but the underlying trends diverged sharply between bank and non-bank lenders. While both segments recorded growth, differences in loan size and credit performance point to distinct borrower needs and risk outcomes.

Bank personal loan originations increased 7.7% YoY, outstanding balances grew 8.9% YoY and average new loan amounts increased 9.2% YoY, indicating continued demand for larger-value unsecured credit. These gains were accompanied by improved performance, with account-level delinquency improved by 194 bps YoY to 26.5% and balance-level delinquency improved by 342 bps YoY to 29.3%. Together, these trends suggest that banks found growth opportunities among consumers with the capacity to manage larger borrowing commitments while maintaining disciplined risk management and portfolio quality.

Non-bank personal loan originations increased by 21.3% YoY and the number of consumers carrying balances rose by 12.7% YoY, significantly outpacing the bank personal loan market. However, average new loan amounts declined by 5.9%, indicating that growth was increasingly concentrated in smaller-ticket lending. This points to continued demand for accessible liquidity and short-term credit solutions, particularly among consumers seeking smaller borrowing amounts.

While this supports broader access to credit, the non-bank personal loan segment also experienced a deterioration in credit performance. Serious account-level delinquency increased by 32 bps YoY to 48.3%, while balance-level delinquency rose by 636 bps YoY to 54.6%.

Lenders across these products target different risk groups: bank personal loan originations have tilted modestly towards subprime over the last two years, reaching 56.6% in Q2 2026 compared to 53.8% two years prior. In contrast, subprime non-bank personal loan customers account for 71.3% in Q2 2026, compared to 68.3% two years prior. This suggests that banks are widening access selectively, without dramatically changing their credit posture, while non-bank lenders are servicing the highest risk, highest need consumers – a dynamic that explains the sharp divergence in delinquency trends across the two segments.

“The contrast between bank and non-bank personal lending shows why growth must be assessed alongside loan value and credit performance,” said Hatea. “Understanding which consumers are driving expansion, and whether that growth is sustainable, is becoming increasingly important for lenders.”

Table 1: Key South African Consumer Credit Market Metrics (Q2 2025 vs Q2 2026)

Product YoY origination growth Serious account-level delinquency rate* YoY basis points (bps) change in delinquency rate
Credit card -16.8% 13.1% +22 bps
Bank personal loan 7.7% 26.5% -194 bps
Non-bank personal loan 21.3% 48.3% +32 bps
Clothing accounts -7.8% 26.5% -8 bps
Retail instalment -10.3% 27.3% +146 bps
Retail revolving -12.2% 16.0% -135 bps
Home loans -10.5% 7.2% -52 bps
Vehicle finance 1.1% 6.4% -115 bps

*Account-level serious delinquency rate, measured as a percentage of accounts three or more months in arrears

“For lenders, sustainable growth will depend on looking beyond volume to the affordability, risk and repayment capacity behind each credit decision,” said Hatea. “Those that can identify where consumers have the capacity to take on credit responsibly, while responding early to emerging stress, will be best positioned to grow without compromising portfolio quality."

Read moreAffordability Reshapes South Africa’s Credit Market in Q2 2026

MPC Rate Hike Intensifies Existing Affordability Pressures on South African Households

Location: Business

TransUnion South Africa says today's decision by the South African Reserve Bank's Monetary Policy Committee to increase interest rates by 25 basis points reflects ongoing concern around inflation risks and inflation expectations. However, the increase comes at a time when many households remain under significant affordability pressure.

The 25-basis-point increase adds to a range of affordability pressures that have steadily eroded purchasing power throughout 2026. While inflation has moderated, many households have yet to experience meaningful relief in their monthly finances.

According to the South African Reserve Bank's June 2026 Quarterly Bulletin, household debt-to-disposable income increased from 61.8% in Q4 2025 to 62.2% in Q1 2026, while debt-service costs remained elevated at 8.4% of disposable income.

Statistics South Africa's Quarterly Labour Force Survey reported that unemployment increased to 33.6% in Q2 2026, while youth unemployment reached 47.4%, highlighting the continued pressure on income growth and household resilience.

According to TransUnion's Q2 2026 Consumer Pulse Study, consumers continue to adapt to financial pressure through behaviourial changes. 52.7% of consumers have reduced discretionary spending, 63.4% actively seek discounts and promotions, 44.2% shop at lower-cost retailers, 38.8% expect difficulty paying future bills and loans, while a proportion are drawing down savings and increasingly relying on credit products and flexible payment solutions to manage daily expenses

"Consumers have demonstrated remarkable resilience, but affordability remains fragile and increasingly sensitive to further cost increases. Today's rate increase adds pressure to households already facing elevated fuel costs, transport expenses and ongoing affordability challenges,” says Lee Naik, chief executive officer and regional president, TransUnion Africa. “Consumers are not facing a new problem, but a deepening of pressures that already exist”

TransUnion notes that affordability pressures have intensified through much of 2026. High unemployment continues to constrain household income growth and weaken financial resilience, contributing to cautious spending behaviour and increased demand for credit.

What the Decision Means for Consumers

A 25-basis point increase is expected to raise monthly repayments on a R1 million home loan by approximately R160 to R170 per month, while repayments on a R2 million home loan could increase by around R320 to R340 per month. A consumer financing a R400,000 vehicle could see repayments increase by approximately R65 per month.

Although relatively modest in isolation, these additional costs arrive at a time when households are already contending with high living expenses and tighter budgets.

TransUnion expects consumers to respond by reducing discretionary spending, reassessing household budgets and delaying major purchases, prioritising debt obligations and essential expenses. Demand for flexible credit solutions and financial management tools may also increase as households seek to preserve cash flow.

While vehicle finance and mortgage repayment performance have remained relatively resilient, TransUnion cautions that additional monetary tightening could place renewed pressure on repayment performance, particularly within unsecured lending segments where delinquency rates remain elevated.

"South Africans have shown remarkable resilience, but affordability remains fragile. The increase reinforces the need for consumers to proactively manage debt, preserve liquidity and maintain healthy credit profiles," says Naik.

Looking Ahead

TransUnion expects affordability to remain a defining issue for consumers through the remainder of 2026. Elevated fuel and transport costs, weak economic growth, rising unemployment and pressure on household budgets are expected to continue shaping consumer spending and borrowing behaviour.

Statistics South Africa reported that GDP contracted by 0.2% in Q2 2026, while the RMB/BER Business Confidence Index fell to its lowest level since 2024, reflecting continued pressure on economic activity, employment growth and consumer confidence.

The key risk for households is not any single affordability shock, but the cumulative impact of multiple pressures occurring simultaneously, including fuel inflation, constrained income growth, elevated unemployment and increasing reliance on credit to manage day-to-day expenses.

"Whether rates remain unchanged or increase, the reality for many households remains the same: consumers are focused on preserving cash flow, protecting repayment performance and managing essential expenses in a challenging economic environment," says Naik. "Affordability will continue to shape how South Africans spend, save and borrow in the months ahead."

Read moreMPC Rate Hike Intensifies Existing Affordability Pressures on South African Households

“Sustainable Jet Fuel” Production at Hopefield – A Green Project Posing High Environmental Risk

Location: News

The Freedom Front Plus (VF Plus) openly advocates for renewable energy and transitioning from fossil fuels to so-called “green alternatives”. The only prerequisite, however, is that the ecological pros of producing the “green alternatives” should outweigh those of fossil fuels. This is quite possibly not the case with the planned plant outside Hopefield, where the […]

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South Africans Aren’t Giving Up on Car Ownership. They’re Just Buying Differently

Location: Business
  • TransUnion's Q2 2026 Mobility Insights Report reveals new passenger vehicle sales grew 15.8% year-on-year, the strongest annual growth in three quarters.
  • Used-to-New Ratio declines from 3.2 to 2.7 year-on-year, reinforcing the shift towards new vehicles
  • Vehicle purchase intent declined from 22% to 19%, as households became more cautious amid rising affordability pressures.

Despite continued fuel price pressure, rising living costs and ongoing strain on household finances, South Africans continue to prioritise vehicle ownership. According to TransUnion's Q2 2026 Mobility Insights Report, new passenger vehicle sales increased 15.8% year-on-year during the quarter, marking the strongest annual growth recorded in the past three quarters despite challenging economic conditions.

Beneath this growth, however, a significant shift is underway. Consumers are showing renewed interest in used vehicles and more affordable options as affordability becomes a more important consideration. The changing dynamics are reflected in vehicle registration patterns.

The used-to-new ratio declined from 3.2 in Q2 2025 to 2.7 in Q2 2026, indicating that new vehicles gained market share over the past year. While the ratio increased from 2.3 in Q1, the year-on-year movement confirms that the broader shift towards new vehicles remains intact.

"One of the most encouraging findings from this quarter's report is that South Africans have not stepped away from vehicle ownership despite a more challenging economic backdrop," says Ayesha Hatea, director of research and consulting at TransUnion Africa.

"What we are seeing instead is a more pragmatic consumer. Mobility remains essential, but consumers are carefully weighing affordability, financing costs, fuel efficiency and long-term ownership expenses before making purchasing decisions."

As consumers increasingly turn to used vehicles, alternative financing structures, rental models and digital purchasing journeys, the industry's risk profile is evolving alongside these opportunities. Fraud is no longer confined to traditional vehicle-finance applications. Businesses face growing exposure to identity fraud, synthetic identities, document manipulation, income misrepresentation, ownership fraud and payment fraud across multiple points of the automotive ecosystem.

Affordability Reshapes the Market

One of the clearest indicators of changing consumer priorities is the rapid rise of Chinese automotive brands. These brands now account for more than one in every five (22.4%) passenger and light commercial vehicles sold in South Africa, highlighting the growing importance of affordability, technology and overall value in purchasing decisions.

"Affordability has become one of the defining themes of South Africa's mobility market," says Hatea. "Consumers are increasingly looking for the best overall value proposition rather than simply the lowest price. Brands that combine affordability, quality, technology and lower running costs are proving particularly attractive in the current environment."

Consumers Remain Engaged but More Cautious

Data from TransUnion's Q2 2026 Consumer Pulse Survey points to a more measured outlook among households.

The proportion of consumers intending to purchase a vehicle within the next three months declined from 22% in Q1 to 19% in Q2. The decline was most pronounced among lower- and middle-income households, while purchase intent among higher-income households increased from 24% to 27%.

Importantly, this moderation should not be interpreted as weakening demand. Rather, it suggests consumers are becoming more deliberate as affordability pressures intensify.

The continued strength in vehicle sales indicates that vehicle ownership remains a priority for many South Africans. However, consumers are increasingly focused on achieving the right balance between affordability, reliability and long-term value.

Hybrid Vehicles Gain Momentum

The same practical mindset is shaping attitudes towards vehicle technology. While internal combustion engine vehicles continue to dominate the market, hybrid vehicles have emerged as the preferred route to electrification. According to the report, 45% of consumers now consider hybrid vehicles when evaluating their next purchase, making them the most attractive electrified vehicle option in South Africa.

Rising fuel costs, concerns around charging infrastructure and growing awareness of operating expenses are encouraging consumers to seek greater efficiency without compromising convenience.

"South Africa's mobility transition is likely to follow a distinctly local path. Consumers want lower running costs and greater efficiency, but practicality remains paramount. Hybrid technology offers a compelling middle ground between affordability, convenience and sustainability.”

"As automotive customer journeys become increasingly digital, businesses need to connect identity, device, behavioural and financial intelligence to distinguish legitimate customers from higher-risk activity without adding friction to the customer experience," adds Hatea.

Value Will Define the Next Phase of Growth

Despite a more challenging outlook for households and businesses, the report suggests the underlying fundamentals supporting vehicle demand remain intact.

For OEMs, dealers, financiers and insurers, future growth opportunities will increasingly depend on their ability to meet consumer expectations around affordability, convenience and efficiency. Organisations that can help consumers navigate a constrained economic environment through competitive pricing, flexible financing solutions and lower-cost mobility options will be better positioned to respond to demand.

Growth, however, must be supported by intelligent risk management. Traditional verification approaches are increasingly being complemented by layered fraud prevention capabilities that connect identity, device, behavioural, financial and regulatory signals. This helps organisations identify higher-risk activity earlier while reducing friction for legitimate customers.

"The South African vehicle market continues to demonstrate resilience, but success in the next phase of growth will depend on understanding a more selective and value-driven consumer," concludes Hatea. “The ability to deliver affordability, efficiency, trust and long-term value will increasingly determine which brands and businesses succeed in the market.”

Read moreSouth Africans Aren’t Giving Up on Car Ownership. They’re Just Buying Differently

South Africans Under Strain as Inflation Persists

Location: Business
  • 79% of South Africans ranked inflation among their top three household financial concerns, up from 74% a year ago
  • Financial optimism fell to 66% from 71% in Q2 2025, while 39% expect to miss at least one current bill or loan repayment
  • 92% view access to credit as important, but only 36% plan to apply for new credit or refinance, while 45% abandoned applications

South African consumers are facing sustained financial strain, with nearly four in ten (39%) expecting to miss at least one bill or loan repayment, according to TransUnion’s Q2 2026 Consumer Pulse Study (CPS). Persistently high inflation continues to reshape how households spend, borrow and save, driving more cautious financial behaviour and softer optimism.

The findings point to a consumer environment marked less by recovery and more by ongoing adjustment. While many households remain financially active, their ability to absorb additional pressure is narrowing, with affordability constraints increasingly shaping everyday decisions.

“Consumers are still managing, but the margin for error is shrinking,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “Even modest increases in essential costs are forcing difficult trade-offs, which is reflected in lower confidence and more cautious credit behaviour.”

Financial Pressure Persists as Optimism Declines

Household finances remain under pressure, with mixed signals pointing to continued strain. In Q2 2026, 43% of South Africans said their household finances were better than planned, down slightly from 44% in Q2 2025. At the same time, 40% said their finances were worse than planned, pointing to persistent pressure rather than a clear recovery trend.

Forward-looking sentiment softened more noticeably. Financial optimism declined to 66%, down from 71% in Q2 2025, while pessimism increased to 19% from 15%. Income expectations also weakened, with 70% of consumers expecting their household income to increase over the next 12 months, compared to 75% a year ago.

A key driver of this shift is the widening gap between income growth and rising living costs. Only 37% of consumers believed their income was keeping up with inflation, while 41% disagreed. Inflation for everyday goods, including groceries and fuel, remained the dominant household concern, ranking among the top three worries for 79% of respondents.

This imbalance is increasingly affecting liquidity, which underscores the extent to which cost pressure continues to affect monthly cash flow and raise the risk of missed payments.

“Inflation remains the single biggest pressure point for households. Even where incomes are rising, essential costs quickly absorb that relief. This makes budgeting discipline and financial awareness more important, because households need to know where they can adjust when pressure rises,” said Hatea.

Households Cut Discretionary Spend to Stay Afloat

In response, South Africans are making practical adjustments to their household budgets. More than half of consumers (53%) said they had cut back on discretionary spending such as dining out, travel, and entertainment over the past three months. A further 28% cancelled subscriptions or memberships, while 24% cancelled or reduced digital services such as wireless, cable TV, or internet.

Debt and savings behaviour also reflect caution. Around 32% of consumers said they had paid down debt faster, 27% saved more in an emergency fund or stokvel, and 20% saved more for retirement. At the same time, 14% cut back on retirement savings, 14% increased their use of available credit, and 13% used their retirement savings, signalling that financial resilience is uneven and for some, deteriorating.

Looking ahead, consumers expect essential categories to remain under pressure. Over the next three months, 37% expect their spending on bills and loans to increase, while 33% expect higher spending on medical care and services. Around 36% expect to increase contributions to retirement funds or investments, although 16% expect to decrease spending in that category.

“These findings show how carefully households are trying to manage trade-offs. Some consumers are still building buffers and paying down debt, while others are drawing on savings or credit to get through the month. That is why the broader picture is one of sustained financial adjustment rather than simple improvement,” said Hatea.

Consumers Want Credit but Few Are Willing to Apply

Credit remains a critical financial tool, but engagement is becoming more selective. The study found that 92% of South Africans view access to credit and lending products as important to achieving their financial goals, unchanged from a year ago. Perceptions of access improved, with 45% believing they have sufficient access to credit, up from 38% in Q2 2025. Around half (50%) of consumers believe they would be approved if they applied.

However, this confidence is not translating into increased demand. Only 36% plan to apply for new credit or refinance existing credit in the next 12 months, broadly unchanged year-over-year (YoY). Among those who considered applying for credit or refinancing, 45% ultimately abandoned their plans.

Cost remains the largest barrier, cited by 30% of consumers who abandoned applications. Credit history was cited by 23%, while 22% pointed to income or employment status. This suggests that while consumers still recognise the importance of credit, many remain cautious about taking on new commitments.

“Credit demand has not disappeared, but consumers are becoming more selective about the obligations they take on. For many households, access is not only about whether credit is available. It is also about whether the cost, repayment terms and approval process feel manageable,” said Hatea.

Where consumers do plan to apply, demand is shifting toward shorter-term and more flexible products. Among those planning new credit or refinancing activity, 34% intend to apply for a new personal loan, up from the previous quarter, while 29% plan to apply for a new credit card. A further 27% plan to use buy now, pay later services.

Fraud Exposure Rising as Digital Use Expands

Digital channels are also playing an increasingly important role in financial participation. Of the 30% who said they used digital banking services, around 46% reported using a digital bank, 56% used buy now, pay later services, and 23% engaged with digital or FinTech providers. This points to continued demand for speed and convenience, alongside the need for clear, responsible credit information.

As digital financial activity grows, identity protection remains an important concern. Around 56% of consumers reported being targeted by online, email, phone call, or text message fraud attempts in the past three months.

Among those targeted, the most common schemes were vishing (34%), smishing (33%), and phishing (31%). The study also found that 26% of consumers had been notified in the past three months that details about their identity or online accounts had been compromised in a data breach.

Consumers are taking some protective steps. In the past 60 days, 53% changed passwords because of cybersecurity concerns, 37% checked their credit reports, and 12% purchased internet security, anti-virus, or anti-malware protection. Yet uncertainty remains a barrier. Among consumers who took no action despite cybersecurity concerns, 56% said they were overwhelmed by what to do.

“As digital financial participation increases, security becomes a core part of financial confidence. Consumers need clear, practical guidance on how to protect their information and respond effectively when risks arise,” said Hatea.

Consumers Seek Control Amid Ongoing Financial Strain

Despite ongoing challenges, South African consumers remain financially engaged and active. Around 34% monitor their credit reports monthly, 13% weekly, and 6% daily. More than half (52%) believe their credit score would improve if businesses used information not found on standard credit reports, such as rental payments, short-term loan history, and buy now, pay later loans.

This reflects a broader shift toward financial visibility, as consumers look for tools and information to better manage their financial position in an uncertain environment.

The Q2 2026 Consumer Pulse Study highlights a market that is resilient but increasingly constrained. Households are adjusting spending, managing debt carefully, and seeking greater control, but persistent cost pressures are testing their capacity to absorb shocks.

“Consumers are doing their best to stay in control in a difficult environment,” Hatea concluded. “For lenders and financial service providers, the opportunity lies in supporting that effort, through transparent pricing, responsible access to credit, and tools that help consumers anticipate and manage financial stress before it escalates.”.

Consumers can get their free annual credit report from TransUnion here.

Read moreSouth Africans Under Strain as Inflation Persists

South Africa’s Vehicle Market Proves Resilient as Affordability Reshapes Demand

Location: Business
  • Passenger vehicle sales reached 114,517 units in Q1 2026, with year-on-year growth moderating to 12.6%
  • Chinese brands account for more than 19% of new passenger and light commercial vehicle sales nationally
  • Hybrid vehicle interest rose to 39%, reinforcing hybrids as South Africa’s primary pathway in the shift toward electrified vehicles

South Africa’s passenger vehicle market remained resilient in the first quarter of 2026, but demand is evolving. Rising affordability pressures, higher fuel costs, the growth of Chinese brands and shifting powertrain preferences are reshaping the automotive landscape.

According to TransUnion’s Q1 2026 Mobility Insights Report, passenger vehicle sales reached 114,517 units in Q1 2026, slightly higher than the 114,246 units recorded in Q4 2025. Year-on-year (YoY) growth eased to 12.6%, down from the stronger performance seen during parts of 2025, but demand remained elevated despite a more uncertain macroeconomic environment.

A Stronger Start, But Growing External Pressures

The report, which provides a first quarter overview, indicates that South Africa entered 2026 on a stronger economic footing. This was supported by easing inflation, lower interest rates over the previous year, reduced load-shedding, and improved financial conditions.

However, rising geopolitical tensions in the Middle East and the associated oil price shock have heightened downside risks. In March 2026, inflation increased from 3.1% to 4.0% in April 2026, while the Monetary Policy Committee (MPC) recently raised the prime lending rate by 25-basis points in May 2026. Combined with higher fuel and transport costs, these factors are expected to place renewed pressure on affordability and consumer spending.

“Vehicle demand has not collapsed, but the market is moving into a more selective phase,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “Consumers are still buying vehicles, but affordability is no longer only about the purchase price. Fuel costs, financing costs, insurance, servicing, and total cost of ownership are becoming central to the decision.”

Residual Value and the True Cost of Ownership

The report found that residual values are becoming an increasingly important component of vehicle affordability. As finance terms extend beyond six years for many buyers, depreciation and resale performance play a growing role in ownership economics, giving brands that retain value more effectively a competitive advantage.

The shift towards longer financing terms and the use of balloon structures reflects a growing focus on monthly affordability and cash-flow flexibility. However, this trend also increases exposure to residual value risk. Where vehicle values underperform expectations, consumers may face refinancing pressure or negative equity at trade-in, making used vehicle market performance an increasingly critical consideration.

Chinese Brands Reshape the Competitive Landscape

One of the most notable structural shifts is the continued rise of Chinese automotive brands. Chinese car sales grew by 75% YoY in Q1 2026, significantly outpacing traditional OEM growth of 2% and the broader passenger and light commercial vehicle (LCV) market growth of 12.7%. As a result, Chinese brands accounted for more than 19% of new passenger and LCV sales nationally, meaning nearly one in five new vehicles sold in South Africa was from a Chinese manufacturer in Q1 2026.

The shift is no longer driven solely by entry-level pricing. Chinese brands are increasingly competing on technology, features, fuel efficiency, range, warranty offerings, and perceived long-term value. On a combined portfolio basis, Chery Group, including Chery, Jetour, Omoda, and Jaecoo, recorded combined sales of 16,094 units in Q1 2026, positioning itself as a top three automotive player.

“Chinese brands have moved beyond the role of price disruptors. They are becoming structural industry players, influencing dealer networks, financing ecosystems, ownership perceptions, and the wider discussion around localisation and industrial competitiveness,” said Hatea.

Diverging Trends Across New and Used Markets

The new and used vehicle markets continued to show differing trends. NaTIS data indicates that new vehicle registrations increased by 11.6% YoY in Q1 2026, marking a sixth consecutive quarter of double-digit growth. In contrast, used vehicle registrations increased by 2.6%, suggesting a modest recovery in the secondary market, although it still trails the stronger momentum seen in new vehicle sales.

The used-to-new registration ratio declined to 2.3 in Q1 2026, the lowest level recorded over the reporting period. While used vehicles still make up the majority at 69% of total registrations, the share of new vehicles has risen to 31%, up from 23% in Q4 2025. This shift has been supported by favourable pricing dynamics, with new vehicle inflation falling to 0.8%, while used vehicle prices remained in deflation at -1.3%.

Confidence Rises, But Caution Remains

Dealer sentiment also reflects the stronger demand environment. New vehicle dealer confidence increased to 67 in Q1 2026, its highest level in 13 years. However, the report cautions that increasing fuel costs, inflation risk, and rising operating expenses could create more challenging conditions in the quarters ahead.

Forward-looking consumer data remains constructive. TransUnion’s Consumer Pulse Survey found that consumers likely to purchase a vehicle in the next few months increased from 19% in Q4 2025 to 22% in Q1 2026. Short-term purchase intent is strongest amongst younger consumers, with 26% of Gen Z and 24% of Millennials indicating plans to buy.

A Gradual Shift in Powertrain Preferences

Powertrain preferences are also evolving. Internal combustion engine vehicles remain the most popular choice, preferred by 49% of consumers in Q1 2026. However, interest in hybrid electric vehicles has grown significantly to 39%, up from 30% in Q4 2025, making hybrids the leading electrified option. Interest in both battery electric vehicles and plug-in hybrids also increased, with each reaching 26%.

“Hybrids are emerging as a practical transition pathway for South African consumers. They offer fuel savings and lower running costs without full dependence on charging infrastructure, which makes them relevant in a market where affordability and operating certainty remain critical,” said Hatea.

A Market Entering Its Next Phase

While domestic demand continues to support the industry, passenger vehicle exports remain under pressure amid trade uncertainty, geopolitical disruption, protectionism, and changing decarbonisation requirements.

“The South African automotive market is not reverting to its previous structure. The next phase will be defined by affordability, value, access to finance and how effectively industry players respond to evolving consumer behaviour,” said Hatea.

Read moreSouth Africa’s Vehicle Market Proves Resilient as Affordability Reshapes Demand

Cost-Of-Living Squeeze Deepens as SA Consumers Shift into Survival Mode

Location: Business

South African households are entering a more constrained financial period, as the modest momentum seen at the end of 2025 comes under pressure from rising living costs.

According to TransUnion’s latest insights, increases in fuel prices, renewed food inflation, and persistently higher borrowing costs are reshaping consumer sentiment, shifting from early signs of recovery in 2026, to a more defensive posture.

This comes as the South African Reserve Bank’s Monetary Policy Committee (MPC) delivers its latest interest rate decision of a 25-basis points increase, against a backdrop of rising inflation, which increased to 4.0% in April from 3.1% in March, reflecting persistent price pressures across essential categories.

Incremental Increase Adds to Mounting Financial Pressure

Following the MPC’s decision to increase interest rates by 25 basis points, TransUnion notes that the move reinforces a financial environment where household momentum is already being challenged, and cost pressures are compounding.

“A 0.25% increase lands on households that are already under strain,” says Lee Naik, chief executive officer, TransUnion Africa. “This is not a new shock; it is an amplification of pressures that consumers are already managing. The combination of higher instalments and rising living costs accelerates the shift from cautious optimism to caution.”

Data from TransUnion’s Q4 2025 Industry Insights Report shows elevated delinquency across several credit products, while TransUnion’s Q1 2026 Consumer Pulse Study highlights increased reliance on credit and sustained reductions in spending.

“When fuel, food and borrowing costs rise together, the impact is not incremental; it is compounding. That is where we see the real pressure emerge, and where financial behaviour shifts decisively,” Naik adds.

Multiple Cost Pressures Converge

“The risk is not just higher rates; it is the combination of cost pressures hitting at once. The affordability challenge becomes immediate and more difficult to manage,” Naik adds.

TransUnion notes that the key issue is no longer the rate decision in isolation, reflecting the cumulative strain of overlapping cost pressures on household affordability.

“At the start of 2026, there was a sense that consumers were beginning to stabilise, with some early signs of recovery in repayment behaviour and financial resilience. That momentum is now being challenged,” says Naik.

“We are seeing a clear shift toward greater caution, as rising fuel and food costs begin to outweigh any incremental relief. The financial pressure facing households is no longer emerging, it is entrenched.”

Even ahead of the MPC outcome, the financial environment facing consumers has materially tightened. TransUnion’s Q1 2026 Consumer Pulse Study showed widespread behavioural adjustment, with households cutting discretionary spending, increasing reliance on credit, and drawing down savings buffers to manage rising living costs.

At the same time, household affordability is being eroded by cost escalation across essential categories. Household food basket data (PMBEJD April 2026) shows the average basket rising to R5,452.09, marking a clear re-acceleration in food inflation driven by fuel and logistics costs.

Credit performance data from TransUnion’s Q4 2025 Industry Insights Report  further reflects growing strain, particularly in non-bank lending segments where delinquency remains elevated, signalling deep financial vulnerability among consumers.

“Consumers are not reacting to a single shock. They are responding to a sustained financial pressure building over time,” adds Naik. “What we are seeing now is a structural shift in behaviour, where households are increasingly prioritising essentials, protecting debt commitments and managing risk more cautiously.”

Looking Ahead: A Structurally More Cautious Consumer Cycle

TransUnion’s outlook remains clear: South African consumers are entering a more cautious financial cycle, as the momentum of 2025 is increasingly challenged by sustained and broad-based cost pressures.

“The environment has shifted from short-term stress to structural pressure,” concludes Naik. “Consumers are no longer adjusting temporarily, they are recalibrating how they manage money, prioritise spending and engage with credit in a more constrained and uncertain environment.”

Read moreCost-Of-Living Squeeze Deepens as SA Consumers Shift into Survival Mode

Masilonyana’s Cash Flow Crisis Warrants Urgent Intervention

Location: News

The Freedom Front Plus (VF Plus) requested the Free State MEC for Cooperative Governance and Traditional Affairs (COGTA), Mr Saki Mokoena, to urgently intervene in the Masilonyana Local Municipality’s serious cash flow problems. This Municipality, which serves Brandfort, Theunissen and Winburg, among other areas, admitted during a portfolio committee meeting in Parliament that it receives […]

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Read moreMasilonyana’s Cash Flow Crisis Warrants Urgent Intervention