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Our Growth Is Not Due to Other Parties’ Problems – Best of Luck John!

Location: News

The Freedom Front Plus (VF Plus) notes the impending resignation of the current DA leader, Mr John Steenhuisen, and wishes him all the best for the future. This development makes it important to point out that the Freedom Front Plus’s significant and sustained growth – for which the party is deeply grateful – is not […]

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Sport, Arts and Culture Department Opts for Symbolism Rather Than Economic Growth

Location: News

The Freedom Front Plus (VF Plus) views the decision of the Minister of Sport, Arts and Culture, Gayton McKenzie, to approve name changes in the Eastern Cape as proof that limited public funds are wasted on misguided priorities. The very same Department that approved 21 geographical name changes – including several costly ones, such as […]

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Business Community Should Take a Firm Stand Against Proposed R100 Billion BEE Fund

Location: Business

The Freedom Front Plus (VF Plus) calls on business leaders and investors to take a firm stand against the R100 billion BEE fund proposed by the ANC Minister of Trade, Industry and Competition, Parks Tau. The original aim of Broad-based Black Economic Empowerment (B-BBEE) – to economically empower black South Africans – has not been […]

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Giant Leap Forward in Tshwane Ward 57 By-Election

Location: News

The Freedom Front Plus (VF Plus) views yesterday’s results of the Ward 57 by-election (Die Hoewes, Lyttelton Manor, Lyttelton) in the Tshwane Metro as a positive and significant step in the right direction. The DA managed to muster only 270 more votes than the Freedom Front Plus. 44,38% of voters supported the Freedom Front Plus […]

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Inclusion in AGOA Is Key to South Africa’s Economic Recovery

Location: News

The renewal of and South Africa’s continued inclusion in the African Growth and Opportunity Act (AGOA) is not merely desirable – it is absolutely essential for the country’s economic survival, job creation and growth. AGOA offers preferential access to the American market, which is crucial for creating thousands of jobs and facilitating billions of rand […]

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How South Africa’s Fintech Industry Is Driving Financial Wellness Through Responsible BNPL Innovation

Location: Business
  • Rising costs are pushing South Africans to seek smarter ways to manage money. BNPL offers flexible, low-risk relief for monthly budgets.
  • Responsible BNPL isn’t just a payment method; it’s a financial wellness tool.
  • When used responsibly, access to interest-free instalments and transparency help consumers avoid high interest or unaffordable debt and build better habits.

As economic pressure mounts and the cost of living continues to rise, South Africans are seeking new ways to balance their monthly budgets without falling deeper into debt. Within this landscape, Buy Now, Pay Later (BNPL) models are rapidly reshaping how consumers approach spending, offering flexibility and access while encouraging responsible money management.

Industry leaders agree that when used correctly, BNPL can be more than a payment tool; it can be a gateway to financial wellness, empowering consumers to make informed, controlled spending decisions that support long-term stability.

“Financial wellness goes beyond survival,” says Mladen Čolić, Head of Fintech at TransUnion South Africa. “It’s about giving consumers visibility into their financial behaviour and the tools to make better decisions. Responsible BNPL use can play a meaningful role in that journey, helping people manage their cash flow, avoid high cost or unmanageable debt, and build a foundation for long-term financial stability.”

From Financial Stability to Financial Wellness

The most recent TransUnion Q4 2025 Consumer Pulse Study shows that while South African households remain under financial pressure, signs of financial adaptation are emerging. In Q4, 48% of consumers reported that their household finances were better than planned, yet 36% anticipated missing at least one bill or loan repayment, highlighting the continued strain many households face. In response, 51% of consumers reported cutting discretionary spending, while others adjusted budgets and prioritised longer-term financial stability. Within this cautious environment, more consumers are turning to flexible digital credit options like BNPL which, when used responsibly, can offer a manageable form of short-term borrowing to help navigate ongoing affordability pressures.

According to data from Payflex, the South African BNPL market Compound Annual Growth Rate (CAGR) is greater than 80% since 2022, with usage particularly strong in fashion, beauty, and consumer electronics categories. E-commerce platforms continue to drive adoption, and BNPL transactions will account for an estimated R25 billion in annual retail spend by 2026, highlighting its growing role in the formal retail economy.

This shift reflects an evolution in how consumers think about money. Financial stability is about meeting immediate needs, keeping bills paid and food on the table while financial wellness goes further, focusing on sustainable, informed financial behaviours that build confidence and resilience over time.

How BNPL Supports Smarter Spending

BNPL allows consumers to purchase goods or services and repay them over a short, fixed instalment period, typically three or four payments at zero interest when paid on time, offering a structured alternative to other forms of short-term credit. For some consumers, avoiding revolving debt allows them to plan purchases more effectively and smooth out cash flow without the burden of high-interest credit.

“BNPL isn’t about fuelling more debt,” says Tracey-Lee Zürcher-Campbell, Chief Marketing Officer at Payflex. “It’s about giving consumers flexibility and predictability, helping them manage their cash flow responsibly while avoiding the pitfalls of high-interest credit. When used correctly, BNPL can support everyday financial stability and contribute to broader financial wellness.”

She adds that this level of transparency is key to consumer trust: “South Africans are increasingly discerning about the financial tools they use. They want products that help them live better within their means, not overextend them. BNPL works when it’s built around clarity, discipline, and accountability.”

Data, Discipline, and Wealth Creation

Responsible BNPL models, supported by data analytics, affordability checks, and consumer education are essential to keeping the category sustainable. For many, these tools also offer a path toward financial inclusion.

Encouraging on-time repayments and transparent data sharing enables BNPL providers to help consumers build a positive payment history, strengthening their financial reputation over time. “When BNPL data is shared responsibly, every on-time payment becomes a useful indicator of positive financial behaviour,” says Čolić. “These data points help build a more complete view of a consumer’s financial profile, supporting greater access and accountability over time.”

As South Africa looks to expanding regulation to support BNPL, the financial sector is showing growing alignment around the principles of transparency, affordability, and responsible innovation. From credit bureaus and FinTechs to retailers and regulators, the shared goal is to ensure that digital credit tools enhance rather than undermine consumer wellbeing.

“The FinTech industry has a collective responsibility to innovate with purpose,” says Zürcher-Campbell. “That means designing products that empower South Africans to make better financial decisions, not just more transactions. When people understand and control their financial choices, they can move from survival to real wellness.”

Read moreHow South Africa’s Fintech Industry Is Driving Financial Wellness Through Responsible BNPL Innovation

Hat-Trick of Honours: TransUnion Commitment to a People-First Culture in Africa Shines

Location: Business

TransUnion’s South Africa, Kenya and Global Capability Centre Africa (GCC Africa) have again been certified as Top Employers in Africa by the Top Employers Institute (TEI). This recognition reaffirms the global information and insights company’s commitment to a people-first culture, continuous growth and a high-performance workplace. It also marks the sixth consecutive year of recognition for South Africa and the fourth for Kenya and the GCC Africa — clear evidence of sustained investment in people, leadership and culture.

“Being recognised for the sixth year in South Africa is a strong endorsement of our consistent people practices,” said Lee Naik, CEO of TransUnion Africa. “We remain focused on building a culture grounded in trust, inclusion and leadership development because business success starts with empowered people.”

The TEI certification follows a rigorous HR Best Practices Survey across six domains and 20 topics, including People Strategy, Work Environment, Talent Acquisition, Learning, Diversity, Equity and Inclusion, and Wellbeing. TransUnion’s recognition reflects a people strategy deeply aligned with its business objectives and purpose. Employees play an active role in shaping strategies through structured engagement, continuous listening and feedback loops that build trust and alignment across the organisation.

Agile workforce planning helps anticipate future skills needs, ensuring employees are supported to build capabilities that allow them to thrive in a fast-changing environment. Flexibility and trust remain central to the work experience. Employees are empowered to manage how and where they work, guided by clear hybrid policies and supported by collaborative spaces that encourage connection and innovation.

Wellbeing is embedded in everyday work design. Initiatives include wellness days, protected time to disconnect and wellness weeks focused on holistic health. Regular assessments ensure these programmes remain relevant and responsive. Psychological safety is also a priority, in an environment where employees feel free to speak up, share ideas and collaborate openly, fueling innovation and belonging.

Leadership development is a cornerstone of TransUnion’s approach in which a clear strategy and competency framework guide growth, supported by measurable outcomes and feedback. Career development is actively promoted through internal mobility, mentoring and sponsored learning opportunities. In 2025, more than one in ten employees advanced through internal promotions, underscoring the company’s commitment to building long-term careers. Within the GCC Africa, investment in learnerships and early-career programmes continue to nurture future leaders and expand access to employment opportunities, strengthening talent sustainability.

“Our people are central to how we deliver impact at scale,” said Shobana Maikoo, Head of GCC Africa. “This recognition reflects our focus on growing skills, developing leaders and creating an environment where individuals feel supported and connected.”

Continued certification across South Africa, Kenya and GCC Africa highlights a consistent, integrated approach to people strategy and workplace culture across regions. In 2026, the Top Employers Institute certified more than 2,400 organisations in 125 countries, positively impacting over 13 million employees worldwide. TransUnion’s inclusion among this group underscores its commitment to excellence in people practices across Africa.

Read moreHat-Trick of Honours: TransUnion Commitment to a People-First Culture in Africa Shines

Most Matriculants Deserve Medals for Defying Odds Stacked Against Them

Location: News

Congratulations to the Matric class of 2025. You have completed a long journey, often in difficult circumstances at home, in your community or at school, putting in the hard work and demonstrating the resilience to reach an important milestone.

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Gauteng Administration Fails to Enrol Learners

Location: News

The failure of the Gauteng government, led by Premier Panyaza Lesufi, to enrol all learners in schools before the 2026 school year commences is unacceptable. A mere 606 of the more than 5 000 Grade 1 and Grade 8 learners have been enrolled over the past two weeks, leaving 4 858 learners without any idea […]

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South Africa’s Credit Market in Q3 2025: Strategic Moves to Manage Risk

Location: Business

  • Vehicle asset finance originations continued to surge, driven by younger consumers and prime and below risk tiers

  • Credit card originations grew, as higher demand was met with lower new account credit limits

  • Personal loan growth and risk patterns diverged amongst bank and non-bank lenders

TransUnion’s Q3 2025 South Africa Industry Insights Report highlights key trends in the South Africa credit market: vehicle asset finance continued its recovery, with stable account volumes and rising balances supported by longer loan terms and more affordable vehicle choices. Credit card usage expanded, with total book balances growing faster than account volumes, even as average balances per card remained stable and new account credit limits were reduced. Non-bank personal loans surged, driven by higher-risk consumers, though elevated delinquencies underscore the importance of strong affordability checks and consumer safeguards.

These shifting patterns in credit demand, usage and risk occurred against the backdrop of a cautiously improving economy. A 25 basis point (bps) interest rate cut in July, driven by favourable inflation trends, gave consumers some relief. However, unemployment remained high[1] at 31.9% for the quarter, highlighting persistent labour pressures that constrained the wallets of many consumers.

Within this context, the credit market showed signs of strategic adjustment. Consumers — especially younger cohorts — relied more on credit to manage day-to-day expenses and cash flow, while lenders recalibrated growth and risk strategies.

Vehicle Asset Finance Recovery Extended

South Africa’s vehicle finance market grew for the third consecutive quarter, driven by younger consumers in prime and below-prime risk tiers. New account originations rose 17.2% year-over-year (YoY), with the average new loan amount increasing to R412,000, up from R400,962 a year earlier.

Growth was supported by a shift in the used-to-new financing ratio, which fell from 2.67 in Q3 2020 to 1.03 in Q3 2025. Near-parity between new and used financing reflects the availability of budget-friendly new models, often compact or entry-level, that have narrowed the cost gap.

Consumers also opted for longer loan terms, prioritising monthly affordability over total lifetime financing cost. In Q3 2025, 49.6% of loans were for 72 months or longer, up from 38.2% four years ago and 45.6% in Q3 2024.

First-time buyer participation remained strong at 42% of originations, slightly up from 40% a year earlier. Nearly one-third (32%) of originations were to Gen Z consumers (born 1995–2010). Among first-time buyers, 80% were prime or below[2], compared to 48% for existing borrowers.

Account-level delinquencies stayed elevated at 7.2%, which underscores the need for early warning and pre-delinquency outreach, especially for borrowers showing signs of payment strain and increased reliance on credit.

“The market is stabilising away from the post-pandemic skew toward used vehicles, supporting consumers’ preferences for warranty coverage and predictable maintenance while expanding inclusion and access,” said Hatea. “In an increasingly competitive market, lenders need to calibrate loan terms, deposits, and residual values to match current conditions and customise products and insurance bundles for segments returning to new purchases.”

Credit Cards Reinforced Role as Financial Buffers for Consumers

Consumers remained under pressure: more than four in ten (41%) households said their income was not keeping up with inflation in Q3 2025, and 77% listed inflation for everyday goods as a top concern, according to TransUnion’s Q3 Consumer Pulse Study.

As consumers sought liquidity amid these concerns, credit card originations rose 13.8% YoY, although average credit limits on new cards issued fell 9.8% YoY. Outstanding balances increased 7.7% YoY, and average balances per card were up 2.6% YoY. The risk mix of card originations shifted towards higher risk borrowers: subprime consumers comprised 58.3% of new cards opened in Q3 2025, up from 52.4% a year earlier, while the share held by prime and above borrowers declined.

Lower credit limits on new cards likely reflect lenders’ efforts to manage affordability and mitigate risk exposure, even as originations skewed toward higher-risk borrowers.

Account-level delinquency increased to 12.7%. This, along with a heavier subprime mix, stable balances, and lower credit lines suggests that lenders have deliberately shifted their focus to riskier borrowers to fuel growth.

Consumers also managed their financial obligations by taking out additional credit. This was evident in the Q3 2025 TransUnion Consumer Pulse Report which found that nearly one third (30%) of surveyed consumers stated that they took an additional credit product to pay off an existing credit product during the quarter.

“While lenders seek growth, they are simultaneously tightening credit lines and deploying early interventions to protect portfolio quality,” said Hatea. “Dynamic credit line strategies and early interventions are key. Expanding pre-delinquency outreach and offering short-term hardship solutions can prevent roll-through into missed payments beyond three months, especially for subprime consumers carrying larger balances.”

Bank and Non-Bank Personal Loan Trends Diverged Further

Differences in growth and risk patterns between bank and non-bank lenders widened in Q3 2025. Banks expanded cautiously, focusing on larger, purposeful loans, while non-bank lenders grew through smaller, short-term loans aimed at higher-risk segments. These shifts reflect differing consumer targeting strategies of the two lender groups and increasing affordability pressures on higher-risk borrowers.

Bank-issued personal loan originations rose 7.6% YoY, with average new loan amounts up 9.3% YoY, reinforcing a trend toward larger loans for purposeful borrowing. However, the number of consumers carrying a personal loan balance fell 3.6% from the previous quarter, suggesting loan consolidation and/or repayment by borrowers. Account-level delinquency reached 28.1%, indicating repayment strain despite banks’ disciplined approach to growth and proactive measures to manage long-term defaults.

Non-bank personal loan originations rose 8.5% YoY, but average new personal loan amounts fell by the same margin of 8.5%. Average balances per account dropped 31.9% YoY, showing that these loans are increasingly used for short-term or emergency needs rather than financing larger purchases or debt consolidation. Risk indicators deteriorated sharply: account-level delinquencies surged upwards to 49.4%, highlighting rising financial stress among non-bank personal loan borrowers, compounded by a greater concentration of subprime consumers.

“Personal loan lenders need to balance access with sustainability,” said Hatea. “Stronger affordability checks and better early warning systems can prevent roll-through into deeper delinquency. Proactive engagement with at-risk consumers and tailored hardship solutions will help preserve portfolio health while maintaining access to credit.”

Table 1: Key South African Credit Market Metrics (Q3 2025 vs Q3 2024)

Product

YoY origination growth

Serious account-level delinquency rate*
Credit card

13.80%

12.70%
Bank personal loan

7.60%

28.10%
Non-bank personal loan

8.50%

49.40%
Clothing accounts

9.85%

25.60%
Retail instalment

-1.45%

27.40%
Retail revolving

5.20%

17.90%
Home loans

10.68%

7.60%
Vehicle finance

17.20%

7.20%

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

With an improving macroeconomic environment, driven by moderating inflation and associated interest rate cuts, continued shifts in the consumer credit market are to be expected. However, Hatea concluded: “Even though there are cautious signs of improvement, lenders and policymakers must remain agile when balancing growth with resilience. Refining segmentation strategies and enhancing early risk detection will be key to supporting consumer financial health and maintaining long-term portfolio stability.”

 

[1] Trading Economics South Africa Unemployment Rate

[2] 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).

Read moreSouth Africa’s Credit Market in Q3 2025: Strategic Moves to Manage Risk

TransUnion Continues to Lead with Innovative People Practices in Africa

Location: Business

Global information and insights company TransUnion (NYSE:TRU) has once again been recognised as a Top Employer in Africa by the Top Employers Institute (TEI). This marks the fifth consecutive year that TransUnion South Africa has received this prestigious certification, with TransUnion Kenya and the TransUnion Global Capability Centre (GCC) Africa being honoured for the third consecutive year.

"Leading TransUnion Africa across eight countries has taught us that true transformation happens when we invest in people first. Our commitment to solving problems that matter has delivered tangible positive impact. This year we launched a groundbreaking middle manager development programme with Duke Corporate Education for high-performing associates, we advanced financial inclusion initiatives reaching millions across Africa and achieved 55% women representation across our employee base. Additionally, we've strengthened mental health support systems for our teams. The impact on our culture, innovation, relevance, and results is tightly correlated with our investment in making our business a great work environment for our employees and prospective recruits," said Lee Naik, CEO of TransUnion Africa.

Championing Diversity and Inclusion

“TransUnion GCC Africa, a fully virtual employer, has grown to almost 1,000 employees in just under four years. The TEI certification acknowledges our commitment to excellence in every aspect of our operations. We have built a highly skilled and motivated team by continuing to invest significantly in our people through initiatives such as sponsored education and learnerships. To date, we’ve spent R12+ million on sponsored education and external training, and had 278 learners go through our learnership programme — 55% were female, 68% have either been absorbed into full time employment or are currently finishing the programme. This creates career growth opportunities while supporting our mission to deliver premium experiences for TransUnion’s clients and consumers in 30+ countries," said Shobana Maikoo, Head of the GCC Africa.

Benchmarking Excellence in HR Practices

The Top Employers Institute programme certifies organisations based on the participation and results of their HR Best Practices Survey. This survey covers six HR domains consisting of 20 topics including People Strategy, Work Environment, Talent Acquisition, Learning, Diversity, Equity & Inclusion, Wellbeing and more. TransUnion's consistent recognition by TEI reflects its commitment to excellence and continuous improvement in HR practices.

The programme has certified and recognised only 2,400 Top Employers in 125 countries/regions across five continents.

Read moreTransUnion Continues to Lead with Innovative People Practices in Africa

TransUnion Africa Appoints Lindani Dube to Spearhead HR Leadership

Location: Business

Global information and insights company TransUnion Africa is pleased to announce the appointment of Lindani Dube as Chief Human Resources Officer and Vice President of TransUnion Africa, leading TransUnion’s operations across Africa, effective 6 January 2025.

Dube brings over 20 years of experience driving growth, HR effectiveness, and cultural transformation for multinational organisations across Sub-Sahara Africa, East and West Africa, and Europe. Her strategic leadership, combined with her passion for people development, positions her as a dynamic force in spearheading innovation and growth at TransUnion in Africa.

In her new role, Dube will oversee all HR functions across TransUnion’s Africa-based markets and centres, including GCC Africa, ensuring alignment with the organisation’s vision and business goals.

In her distinguished career, Dube has held executive HR roles at LafargeHolcim, MultiChoice, General Electric, Worley Parsons, and Howden Africa Holdings. She has led essential cultural transformation initiatives, significantly improved organisational performance, and championed diversity, equity, and inclusion programmes. Notably, her strategic acumen has delivered measurable results, including optimising workforce structures, negotiating impactful agreements, and driving business efficiencies.

Lee Naik, CEO of TransUnion Africa, commented: “Lindani is an extraordinary leader with a proven track record of aligning HR strategies to business outcomes. Her innovative approach to unlocking talent and driving cultural transformation will undoubtedly elevate TransUnion’s mission of delivering ‘Information for Good.’ We look forward to the energy and expertise she will bring to our teams across Africa.”

Dube is equally enthusiastic about her new role, saying: “I am excited to join an organisation that prioritises growth, innovation, and people development. I look forward to contributing to TransUnion’s vision by driving impactful HR strategies that build a culture of excellence, inclusion, and empowerment.”

Dube holds a Master’s in Business Leadership (Strategic HR Management) from UNISA School of Business Leadership and a postgraduate business management diploma. She is an accredited coach and an active member of professional bodies, including the Institute of Directors South Africa (IoDSA).

Read moreTransUnion Africa Appoints Lindani Dube to Spearhead HR Leadership

South Africa’s Auto Market Shows Signs of Recovery as Used Vehicle Demand Rises

Location: Business
  • Used vehicle financing outpaces new car financing, with a ratio of 1.56 to 1 as affordability remains a key driver
  • New vehicle finance agreements grow by 12.7% YoY, despite economic uncertainty
  • South Africa reaches a milestone of 1,000+ battery electric vehicle (BEV) sales in 2024, with PHEV and HEV sales growing over 60% YoY

The latest TransUnion South Africa Vehicle Pricing Index (VPI) for Q4 2024 reveals a cautiously optimistic outlook for the country’s automotive sector, with improving economic conditions encouraging consumer confidence while affordability challenges continue to shape purchasing decisions.

Key insights from the report indicate a continued shift towards used vehicles, with financing for pre-owned vehicles outpacing new car financing at a ratio of 1.56 to 1, up from 1.23 in Q4 2023. Meanwhile, new vehicle prices increased by 1.7% due to supply chain constraints and production costs, while used vehicle prices declined by 2.8%, making them a more attractive option for cost-conscious buyers.

Despite these challenges, new vehicle finance agreements grew by 12.7% year-over-year (YoY), with Gen X and Millennials accounting for 67% of new agreements*.

“South Africa’s automotive sector is navigating a complex landscape, balancing economic improvements with persistent affordability challenges,” says Marcia Mayaba, Sales Vice President, Auto Information Services at TransUnion South Africa. “The demand for used vehicles continues to grow, while we’re also seeing an increasing shift towards alternative financing and ownership models, such as leasing and car subscriptions, particularly among younger consumers.”

Used Vehicles Dominate, While New Car Market Seeks Stability

The Q4 2024 VPI report highlights a strong preference for used vehicles, with financing activity significantly outpacing new vehicle sales. This shift is largely driven by affordability concerns, as inflationary pressures and high vehicle prices continue to impact consumer purchasing decisions.

The used-to-new financing ratio increased to 1.56 in Q4 2024, reflecting a clear trend toward more budget-friendly alternatives. At the same time, new vehicle registrations grew by 14.4% YoY, supported by improved economic conditions and rising consumer confidence.

The Future of South Africa’s Auto Market: EV Growth and Digital Financing

Looking ahead, the report highlights the rising potential of electric vehicles (EVs) in South Africa, signalling a significant shift in consumer interest and market dynamics. The country reached a milestone of over 1,000 battery electric vehicle (BEV) sales in 2024, a small but significant step in a market still dominated by petrol and diesel vehicles. While EVs represent a fraction of total sales, the 60% year-over-year growth in hybrid (HEV) and plug-in hybrid (PHEV) sales signals a gradual shift in consumer interest toward more sustainable options.

The introduction of more affordable EV models priced under R1 million, such as the BYD Dolphin and Seal, is expected to accelerate adoption in 2025, making EV ownership more accessible to a broader segment of the market. However, affordability remains a key barrier, with high upfront costs and concerns around charging infrastructure limiting mainstream adoption.

“EV adoption in South Africa is gaining momentum, but for this growth to be sustained, industry players must collaborate to make ownership more accessible," says Mayaba. "With the right financial products, infrastructure expansion, and increased consumer awareness, EVs have the potential to reshape South Africa’s automotive landscape in the years to come.”

Financing Trends and Alternative Ownership Models Gain Momentum

The report also reveals an evolving vehicle financing landscape, with leasing, subscriptions, and rent-to-buy agreements gaining traction as consumers seek more flexible and cost-effective solutions.

For the first time, the Q4 2024 VPI report explores the impact of e-Hailing, leasing, and car subscriptions on the South African auto market. While outright vehicle ownership remains dominant, alternative mobility solutions are becoming increasingly relevant. The report indicates that leasing and subscription-based models are particularly appealing to Millennials and Gen Z consumers, who prioritise affordability and flexibility over long-term ownership commitments.

Additionally, e-Hailing continues to serve as a supplementary transport solution rather than a direct competitor to vehicle ownership. According to recent data from inDrive, an international ride-hailing service, 21.1% of South Africans make us of e-hailing services, reflecting the growing popularity of these transportation alternatives. However, the majority of users still aspire to own a vehicle in the long term. To address affordability constraints and credit access challenges, leasing and rent-to-buy options are emerging as viable alternatives, offering consumers flexible solutions that align with their financial situations.

While lower-value finance agreements (under R250,000) declined, a growing share of financed vehicles now falls within the R250,000 to R750,000 range. This shift suggests that while affordability remains a concern, consumers are prioritising flexible financing solutions and adjusting their purchasing behaviour to align with available credit and economic conditions

“The traditional model of vehicle ownership is evolving,” adds Mayaba. “While outright ownership remains a key aspiration, younger generations are increasingly exploring flexible mobility solutions that align with their financial realities and lifestyle preferences.”

As South Africa’s automotive sector continues to evolve, the interplay between affordability, alternative financing models, and emerging technologies like EVs will shape its future. While used vehicles remain the preferred choice for many consumers, the growth in digital financing and the introduction of more accessible EV models signal an industry on the brink of transformation. Collaboration among industry players, financial institutions, and policymakers will be key to ensuring sustainable growth and greater accessibility for all consumers. With the right innovations and strategies, the sector is well-positioned to adapt to changing market dynamics and drive long-term success.

Read the latest TransUnion VPI Q4 2024 report here.

ENDS

Notes to Editors:

* Gen X (born 1965-1980), Millennials (born 1981-1996) and Gen Z (born 1997-2012)

The TransUnion South Africa Vehicle Pricing Index (VPI) tracks vehicle pricing trends across new and used markets, integrating data from SACRRA and industry-leading sources.

For more information, visit: www.transunion.co.za

Read moreSouth Africa’s Auto Market Shows Signs of Recovery as Used Vehicle Demand Rises

South Africa’s Lenders Adopted Prudent Risk Strategies to Drive Growth in Q4 2024

Location: Business
  • Card issuers rewarded performing existing cardholders with credit limit increases, but offered lower credit limits to new cardholders
  • Consumers increasingly turned to non-bank lenders for personal loans
  • Vehicle loan originations increased for the second consecutive quarter, indicating optimism for the sector

According to TransUnion’s (NYSE:TRU) Q4 2024 South Africa Industry Insights Report, the country’s credit card issuers have adapted their acquisition strategies to enable prudent growth, while effective risk management has led to a decline in account-level delinquencies. During Q4 2024, credit card issuers reduced the average credit card limit on new accounts by 3.9% year-over-year (YoY), while at the same time they increased credit limits on existing credit cards[1] by 5.0%.

The limit increase observations were prominent among prime plus consumers (+4.1% average credit limit increase) and super prime[2] consumers (+1.8%). As a result of higher line access and consumers continuing to leverage credit cards to meet financial and transactional needs, total outstanding balances rose by 7.8% YoY. These insights are echoed in TransUnion South Africa’s Q4 2024 Consumer Pulse Report, where 13% of consumers responded that they had increased their usage of available credit.

An improving performance picture, as observed since Q2 2022, continued as delinquencies (measured as accounts 90 days or more past due) decreased by 34 basis points (bps) YoY during Q4 2024. This trend shows that South African consumers have been able to maintain their credit card payment obligations, while leveraging their cards to navigate the continued high cost of living that has put pressure on disposable income.

“Lenders who are sustaining growth and profitability are drawing on enhanced risk attributes to stimulate a greater share of spend and wallet by identifying consumers who are likely to use credit lines judiciously,” said Lee Naik, CEO of TransUnion Africa. “At a time when new account acquisition is costly, enabling lower-risk consumers to re-engage with their inactive cards, or to extend the use of existing cards, will encourage prudent growth and enable customer loyalty.”

Personal loan lenders target younger borrowers

While personal loan originations from traditional banks declined by 6.2% YoY in Q4 2024, personal loan originations from non-bank lenders increased by 13.9% YoY. Non-bank personal loan originations among Gen Z[3] consumers grew by 48.5% YoY, with this cohort accounting for 15.5% of all non-bank originations.

Non-bank personal loan originations increased YoY across all risk tiers (except for the super prime risk tier, where originations declined by a marginal 1.0% YoY), with the greatest increase seen among prime borrowers (16.1%). However, bank personal loans declined across all risk tiers YoY, except for subprime, where they increased by 6.0% YoY.

Banks are expanding their personal loan offerings to a greater proportion of subprime borrowers. Among bank personal loans, the share of subprime borrowers increased from 53% in Q4 2023 to 58% in Q4 2024, with the share of near prime borrowers remaining consistent across the year. There were minimal YoY fluctuations across the remaining risk tiers. In contrast, the distribution across risk tiers for non-bank personal loans remained consistent over the last two quarters of 2024.

The personal loans market continues to be dominated by younger borrowers, although the total share of originations by borrowers aged 45 and younger did decline marginally in 2024. Seventy-five percent of bank personal loans were granted to Gen X and Millennial customers during Q4 2024, down from 78% one year prior, while 70% of non-bank personal loans were granted to the same age group in Q4 2024, compared to 72% one year prior. At the same time, both lender types are growing their portfolio among the youngest Gen Z borrower group, with 19% of bank personal loans going to Gen Z borrowers in Q4 2024, up from 16% one year prior, and 16% of non-bank personal loans going to these consumers in Q4 2024, up from 12% one year prior.

With respect to credit performance, bank personal loan account-level delinquencies at 90+ days past due dropped by eight bps YoY to 26.6%, while non-bank personal loan delinquencies increased by 452 bps to 40.6%.

“Non-bank personal lenders have a more tolerant risk appetite than banks, and they are responding positively to market demand across age groups and risk tiers,” says Naik. “Lenders that maintain rigorous risk assessment practices that enable greater and earlier prediction of risk, offer education on how to use and manage credit, and empower younger consumers to build their credit profiles, will ensure the continued sustainability of the personal loan market.”

Vehicle loan market continued its recovery path

The vehicle loans market showed encouraging signs of continued growth, as origination volumes increased by 9.6% YoY, and average new loan amounts grew by 1.4%. The greatest growth in originations was observed among Gen Z consumers, where originations grew by 27.9%, although their share of total new finance agreements remains relatively low compared to older age groups. This is the second consecutive quarter in which total vehicle loan originations grew YoY, with the last increase in origination volumes before these two increases having been in Q3 2022. Given the 0.25 bps decrease in interest rates as of November 2024 and a positive outlook for consumer confidence, the vehicle loan market is expected to continue this recovery trend.

These positive trends were also evident in the Q4 2024 TransUnion South Africa Vehicle Pricing Index, that revealed a growing share of financed vehicles within the R250,000 to R750,000 price range. This shift suggests that, while affordability may still be a concern, consumers are prioritising flexible financing solutions and adjusting their purchasing behaviour to align with available credit and economic conditions.

“While the two recent interest rate decreases were just 25 basis points each, the significant increase in new vehicle loan originations indicates that South Africans are becoming more optimistic about their financial futures,” says Naik. “While vehicle ownership is aspirational for many individuals, it’s also the key to unlocking growth for entrepreneurs, and the owners of micro and small enterprises, all of whom are the engines of economic growth in South Africa.

“As part of our drive to expand financial inclusion, TransUnion has included a wide range of alternative data into our scoring solutions, so that more South Africans are more visible in our risk scoring models, in turn creating the platform for them to access finance for the first time.”

 Table 1: Key South African Credit Market Metrics (Q4 2024 vs Q4 2023)

Product

YoY origination growth

Serious account-level delinquency rate*

YoY basis points (bps) change in delinquency rate
Credit card

5.6%

12.0%

-33 bps
Bank personal loan

-6.2%

26.6%

-8 bps
Non-bank personal loan

13.9%

40.6%

452 bps
Clothing accounts

-4.0%

26.4%

-143 bps
Retail instalment

14.9%

27.5%

-204 bps
Retail revolving

11.9%

14.5%

-500 bps
Home loans

-13.2%

7.1%

26 bps
Vehicle finance

9.6%%

4.8%

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

 

  • [1] Credit card accounts that are currently open and active in the portfolio.
  • [2] 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).
  • [3] TransUnion age distribution: Gen Z (Born 1995 – 2010); Millennials (Born 1980-1994); Gen X (Born 1965-1979); Baby Boomers (Born 1946-1964
Read moreSouth Africa’s Lenders Adopted Prudent Risk Strategies to Drive Growth in Q4 2024

South African Consumer Credit Market Adapts to Economic Pressures in Q1 2025

Location: Business
  • 36% of consumers planning to take out a new car loan or lease within the next year prefer hybrid vehicles, reflecting a growing inclination towards fuel-efficient and environmentally friendly transportation options
  • 79% of consumers expect their income will grow in the coming months
  • 82% of respondents are extremely or very concerned about inflation, with rising costs continuing to be a major stressor for consumers as they navigate household budgeting and financial planning

South African consumers continue to adapt to a fluctuating economic environment, with TransUnion’s Q1 2025 Consumer Pulse study[1] revealing key trends in household financial management, credit activity and vehicle financing. Amid ongoing financial pressures, a significant increase in intended hybrid vehicle financing highlights evolving consumer preferences.

“Despite the challenges posed by inflation and economic uncertainty, South Africans continue to show resilience in managing their finances,” said Ayesha Hatea, Director of Research and Consulting at TransUnion. “We are seeing notable shifts toward more purposeful financial planning, credit management and strategic spending. While economic pressures remain, consumers are finding ways to balance credit usage, savings, and debt repayments more effectively.”

Economic Concerns and Credit Usage Trends

The report highlights consumers’ ongoing financial concerns, with 42% of respondents stating that their household income is not keeping up with inflation, despite inflation being at the lower end of the Reserve Bank’s target range[2]. These ongoing concerns could be because 40% of consumers said their income stayed the same in the past three months, while 22% reported it decreased.

“With more than six in ten South Africans reporting no increase in their income, it’s clear to see why consumers are trying to find new ways to manage their financial commitments, including taking on more credit, and different types of credit, for key purchases,” said Hatea.

The survey data reveals that 37% of respondents plan to apply for new or refinance existing credit within the next year, with 52% of all those surveyed saying they’ve used Buy Now, Pay Later services in the past 12 months.

Amid ongoing concerns about a recession, consumers indicated that they are actively taking steps to prepare. Among those who said they think South Africa is currently in a recession or will be in one by the end of Q1, the most respondents (59%) said they’re preparing for a possible recession by reducing spending followed by 58% building up their savings and 35% prioritising paying down debt.

Debt Repayments and Savings Trends

The data also reveals shifting trends in debt repayments and savings. A worrying trend is that 38% of respondents in Q1 2025 said they’ll be unable to pay at least one of their current bills and loans in full, up from 35% in Q4 2024.

Among those who said they’ll be unable to pay, 34% reported they plan on paying partial amounts they can afford but not the whole balance, while 25% said they’ll dip into their savings to help pay their current bills and loans. A further 20% of consumers aim to borrow money from friends or family members to meet their payment commitments. Additionally, 35% of those surveyed are looking to take on temporary or gig work.

“Managing debt effectively while maintaining savings is a key challenge for many South Africans,” said Hatea. “Consumers who are struggling to meet their payment commitments should engage with their lenders to potentially renegotiate current payment terms. Lenders do not want consumers to default on their debts, and they are often willing to discuss available options with the intention of creating prudent, sustainable financial solutions.”

Hybrid Vehicle Financing Expected to Increase

Of particular interest in the Q1 2025 study is the finding that 36% of consumers planning a new vehicle loan or lease within the next year would consider hybrid vehicles, while 25% would consider an electric vehicle. In comparison, 32% preferred traditional internal combustion engine vehicles, making hybrid cars the top consideration for new vehicle loans or leases among those surveyed.

The latest TransUnion Vehicle Pricing Index (VPI) reflects this trend, with the anticipated introduction of more affordable EVs priced under R1 million expected to accelerate their adoption in 2025, thanks to broadening consumer options in the hybrid and EV market.

“This trend highlights how consumers are adapting to broader economic and environmental changes,” said Hatea. “Hybrid vehicles are becoming more accessible, and their appeal extends beyond cost savings to include long-term benefits such as reduced environmental impact and lower running costs. As this market continues to evolve, we anticipate sustained growth in consumer interest and adoption.”

Fraud Concerns

The study highlights that nearly one in three respondents (31%) check their credit reports monthly, with 54% of those who said they monitor their credit doing so to try and improve their credit score. This indicates an awareness of the importance of credit health management.

A smaller 34% of credit monitoring consumers said they check their credit reports to protect against fraudulent activity. More than half (51%) of all those surveyed reported being targeted by email, online, phone call or text messaging fraud in the last three months but not falling victim, emphasising the importance of heightened security awareness.

Among the most common fraud schemes reported by those who said they were targeted were money/ gift card scam (33%), smishing (33%), phishing (32%) and third-party seller scams on legitimate online retail websites (31%), emphasising the urgency for consumers to remain vigilant.

“With digital transactions and online banking becoming standard, financial institutions are urged to implement stronger fraud prevention measures, while consumers are encouraged to monitor their credit activity and adopt safer financial practices,” said Hatea.

Adapting to Improve Credit Health

In response to ongoing financial pressures, South African consumers are making strategic adjustments to their household budgets. In the past three months, 52% said they have cut back on discretionary spending such as dining out, travel and entertainment, with 43% of them reporting scaling back on large purchases like furniture, appliances and cars. This cautious approach highlights a continued emphasis on financial resilience and long-term stability.

“Our findings show that South Africans are taking a more proactive approach to managing their finances amid economic uncertainty,” said Hatea. “While financial pressures persist, consumers are prioritising essential spending, reducing discretionary expenses, and making thoughtful financial decisions to maintain stability. Providing them with the right tools, education and financial products will be crucial in supporting their financial well-being in the months ahead.”

The Reserve Bank’s decision to reduce the repo rate by 0.25% to 7.5% this January, with no change in March[3], aims to support economic growth and ease borrowing costs for consumers. This adjustment, coupled with improved inflation expectations, is expected to provide further relief to consumers and stimulate economic activity.

As economic conditions evolve, businesses, financial institutions, and policymakers will need to align with these shifting behaviours, offering solutions that promote financial inclusion, long-term stability, and economic growth.

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

[1] Q1 2025 South African Consumer Pulse Study was a survey of 950 South African adults from Feb. 10 to 24, 2025.

[2] Inflation Targeting Framework

[3]: repo rate by 0.25% in January to 7.5%: Current Market Rates 

Read moreSouth African Consumer Credit Market Adapts to Economic Pressures in Q1 2025