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TransUnion South Africa Busts Three Short-Term Insurance Industry Myths

Location: Business

Every industry has its myths, and the short-term insurance environment is no exception: leading industry players plan their growth strategies around perceptions of a limited pool of customers, focusing mostly on pricing strategies to attract new business, and finding ways to avoid consumers perceived as too risky.

The best way to confirm or ‘bust’ industry myths is to test them through experiments and data analysis to reveal the truth – and that’s exactly what TransUnion South Africa did with data it holds in the short-term insurance sector.

“South African consumers remain under pressure despite recent interest rate cuts, making this an opportune moment for insurers to rethink their customer acquisition and retention strategies – and to challenge the truisms they’ve relied on in recent years,” said Schalk Fischer, insurance lead at TransUnion South Africa. “To drive better outcomes, insurers must evolve and adapt their strategies to respond to changing market conditions, drawing on risk-management solutions that feature unique data and advanced analytics.”

Myth 1: With stagnant total policy volumes, the only way for an insurer to grow is to win customers from other insurers.

In assessing all new short-term insurance policies taken out between April 2024 and March 2025, TransUnion found that only 17% of new policies were opened by consumers moving to another insurer. Another 37% involved ‘policy splitting’, where consumers moved cover of one of their assets to a new provider, but did not move their whole portfolio.

This means that roughly 54% of new policies are opened due to churn – a significant portion, but certainly not the overwhelming portion that many insurers believe it to be.

“This data shows key growth opportunities for insurers lie among consumers who are new to insurance. In fact, 33% of new policies opened during the time of the study were taken out by consumers who had not had an insurance premium in the previous 24 months,” Fischer said. “While the short-term industry will always be very competitive, there are growth opportunities outside of working aggressively to attract customers from other insurers.”

Myth 2: Loyalty in short-term insurance is dead. Price is the primary variable.

With many consumers scrambling for cost savings, price is perceived to be the most important differentiator between insurers, along with being seen as the main reason that consumers leave one insurer for another.

TransUnion’s analysis showed that 13% of insured consumers who cancel their insurance eventually return to their original insurance provider over time, without switching to another insurer in the interim.

This brand loyalty is fairly consistent between different distribution channels: 9% for banks’ insurance offerings, 11% for brokers, and 14% for direct insurers.

“These findings highlight that, while insurance pricing is certainly a leading consideration among consumers, it is evident that brand loyalty is still a driving factor,” Fischer said. “Marketing and acquisition strategies clearly focus on price, but there’s a greater than expected opportunity to build loyalty that will either retain customers or encourage them to return to brands they have trusted before.”

Myth 3: The new-to-insurance segment is small and only includes risky younger consumers.

TransUnion’s analysis revealed that one in three (33%) consumers who took out policies between April 2024 and March 2025 were new to insurance – they did not have short-term insurance payments linked to their identity number in the previous 24 months.

However, this doesn’t necessarily mean that all newly insured consumers were uninsured before. Some may have previously been covered under their partner or spouse, and later separated their insurance portfolios, or they could have been young adults who sought their own cover after being included in their parents’ policies.

“These findings show that insurers need to expand the scope of how they segment their target audiences, as new-to-insurance consumers are not always who they’re perceived to be,” Fischer adds.

The analysis revealed additional insights into consumers taking out a policy for the first time. Only 6% were aged 18 to 24 years – perceived to be the riskiest consumers – while the greatest portion of these consumers (36%) were aged 25 to 35 years, followed by 36 to 45 year olds, who took out 25% of new policies. It’s clear, then, that consumers aged 25 to 45 present the greatest opportunity for insurers.

In overlaying loyalty data with these findings, it emerged that only 1% of 18 to 24 year olds shopped around for a better deal once they were granted cover, while less than a quarter (24%) of 25 to 35 year olds shopped around. However, consumers aged 36 to 45 showed the greatest propensity to shop around for a better deal, with 29% taking on that challenge.

The myth is officially busted: opportunities for growth lie well beyond young consumers who have only just reached eligibility to apply for their own short-term insurance policies.

“While the short-term insurance market is perhaps not growing at the rate that many insurers would like, our analysis shows that it’s far from stagnant. Clear segmentation along with careful risk management and profitability assessments can help providers acquire lower-risk, higher-value customers across diverse groups of potential customers,” Fischer said. “While price remains a significant driver among consumers, other variables continue to play a meaningful role in building customer loyalty.”

Read moreTransUnion South Africa Busts Three Short-Term Insurance Industry Myths

Three New Sinkholes

Location: News

Three new sinkholes formed along the R500 outside Carletonville after large parts of the West Rand experienced heavy rainfall and hail over the past week. The sinkholes are located on the route between Carletonville and Ventersdorp, only one kilometre from Rooipoort Primary School. The Freedom Front Plus (VF Plus) urges motorists to exercise extreme caution, […]

The post Three new sinkholes form along R500 near Carletonville appeared first on Freedom Front Plus.

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South Africa’s Automotive Market Accelerates to 11-Year High as Value Brands and Younger Buyers Drive Momentum

Location: Business
  • 111 697 new passenger vehicles sold in Q3 – up 23.4% year-on-year, the highest quarterly total since 2014
  • Chinese brands captured a record 15%+ market share, growing almost nine times faster than the market average
  • Passenger-vehicle exports rebounded 4.1% year-on-year, powered by a 63.7% September surge to a six-year high

South Africa’s automotive market shifted into top gear in the third quarter of 2025, posting its strongest sales performance in more than a decade as greater macro-economic stability, easing interest rates and a firmer rand supported renewed consumer demand. According to TransUnion’s Q3 2025 Mobility Insights Report, total new-passenger-vehicle sales reached 111 697 units, 23.4% higher year-on-year (YoY), while new vehicle inflation dropped to a record low of 1.5% (since tracking began in 2008), creating one of the most competitive pricing environments in recent memory.

“Affordability and choice are redefining South Africa’s automotive landscape,” says Lee Naik, CEO TransUnion Africa. “Consumers are seeking greater value and flexibility and manufacturers that meet this demand through innovation and pricing discipline are winning the race for growth.”

Affordability Drives Record Growth and Market Realignment

Although established OEMs returned to positive growth in Q2 and Q3 2025, the market’s transformation is being led by Chinese manufacturers expanding nearly nine times faster than the overall market, with YoY growth of 89% in Q2 and 88% in Q3.

Their combined share has quadrupled since 2021 to more than 15%, powered by competitively priced, feature-rich SUVs and sedans that appeal to cost-conscious yet tech-savvy buyers. Top-performing value brands YoY included JAC (67% volume increase), GWM (54%), Mahindra (42%) and Chery (35%), while BMW (27%) proved that premium marques can still thrive by combining desirability with strong product pipelines.

“This isn’t a short-term surge, it’s a structural reset,” adds Naik. “The success of value-driven models shows how affordability, technology and trust are now the true levers of brand growth in South Africa.”

Younger and High-Income Buyers Sustain Demand

Despite surging sales, TransUnion’s recent Consumer Pulse Survey shows a modest easing in purchase intent, with the share of respondents likely to buy a vehicle in the next three months declining from 19% in Q2 to 17% in Q3. The report suggests that current sales momentum is being driven primarily by pent-up demand, dealer incentives and fleet renewals, rather than broad-based consumer confidence.

Purchase behaviour also remains sharply segmented across both age and income groups. Younger consumers continue to lead intent, with 21% of Gen Z and 19% of Millennials planning to buy a vehicle in the next three months, compared to 13% of Gen X and 8% of Baby Boomers. From an income perspective, high-income households earning R200 000 or more per month show the strongest intent at 34%, while middle- and lower-income consumers remain significantly more cautious in their purchasing outlook.

Electrification: A Tale of Price and Generation

Internal-combustion vehicles (ICE) remain the single largest category in consumer purchase intent, accounting for 42% of consumer preference, while interest in hybrid (39%) and plug-in hybrid (24%) models is steadily increasing. The shift toward electrification is most pronounced among Gen Z consumers, with 55% favouring hybrids and 32% considering battery-electric vehicles (BEVs).

This generational shift toward greener technology is evident among high-income buyers, with 75% considering plug-in hybrids, driven primarily by their perceived affordability. In contrast, preference for ICE vehicles remains largely affordability-based among lower-income segments. Higher budgets within affluent households enable greater consideration of hybrid electric (HEV), plug-in hybrid (PHEV), and battery electric vehicles (BEV), reinforcing an emerging “electrification divide.” This dynamic presents a significant opportunity for OEMs and financiers to tailor product offerings and financing strategies to meet the distinct needs of different age and income segments.

Connected Cars: Data Becomes the New Engine

Q3’s Mobility Insights Report special feature, The Connected Road, explores how connected-car technology is transforming mobility. Connectivity is now standard in most post-2015 vehicles, enabling real-time navigation, predictive maintenance, remote access, and advanced safety systems. Yet global data warns of “connectivity fatigue”: Over three quarters (76%) of drivers internationally don’t subscribe to connected services, mainly due to cost.

Naik says: “South Africa has a chance to leapfrog global missteps by focusing on value-adding applications, safer driving, cheaper insurance and smarter maintenance rather than gimmicks.”

Exports Rebound and Dealer Confidence Climbs

Passenger-vehicle unit exports rose 4.1% YoY after a steep Q2 contraction, driven by a 63.7% September surge that lifted shipments to a six-year high. Meanwhile, the RMB/BER Motor Traders Confidence Index advanced to 54, marking its second net-positive reading of 2025 and notably placing it above the neutral 50-point mark, which signals growing dealer optimism amid sustained sales momentum and improving export conditions.

Balancing Value and Transformation

The convergence of affordability, segmentation, electrification, and connectivity signals a pivotal shift in the automotive industry. “The future belongs to brands and financiers that master both the value-driven present and the connected, electrified future,” concludes Naik. “Data-led insight will be the bridge that connects today’s strategies with tomorrow’s innovation

Read the full TransUnion South Africa Q3 2025 Mobility Insights Report here.

Read moreSouth Africa’s Automotive Market Accelerates to 11-Year High as Value Brands and Younger Buyers Drive Momentum

South African Automotive Market: Recovery Gains Traction but Headwinds Persist

Location: Business
  • New passenger sales rose 22.5% year-on-year, the strongest volumes since 2014
  • Chinese automakers expanded their market share to nearly 15%, up from just 3.1% in 2022
  • Passenger-vehicle exports contracted sharply, down 24.6% amid weaker global demand and new US tariffs

TransUnion’s latest Mobility Insights Report shows South Africa’s automotive market building momentum in 2025, supported by a favourable interest rate environment, record-low new-vehicle inflation, and liquidity from the two-pot pension reform. While recovery is underway, the outlook remains fragile, with affordability constraints and export headwinds threatening longer-term growth.

Supportive Shifts, But Growth Remains Fragile

The South African Reserve Bank has cut interest rates five times since September 2024 and inflation has returned to the lower end of the 3-6% band1, providing households with some relief. Consumer confidence has improved among middle- and higher-income groups, although low-income consumers continue to face pressure from food and electricity costs2.

“These macro shifts provide short-term support to the vehicle market, but momentum is likely to taper in 2026 without further reforms,” said Lee Naik, CEO of TransUnion Africa.

Affordability And Value Drive a Surge

Passenger car sales broke through the 35,000-unit ceiling for the first time in years, with July and August 2025 marking the strongest volumes since 2014. According to Naamsa, new passenger car sales grew 22.5% year-over-year (YoY) in Q2, fuelled by lower borrowing costs, aggressive OEM incentives and the entry of new value-focused brands.

Chinese automakers continued their rapid growth, expanding market share from 3.1% in 2022 to nearly 15% in Q2 2025. Their affordable, tech-rich SUVs and expanding dealer networks are reshaping competition, forcing legacy OEMs to rethink pricing, features, and model cycles. Toyota retained overall leadership, with Suzuki securing second place for the second consecutive quarter.

“Improved affordability, aggressive incentives and growing demand for value brands, alongside modest support from two-pot withdrawals, helped sustain momentum through 2025. However, as interest rates remain elevated and credit conditions tighten, and the two-pot effect normalises, growth is expected to moderate in 2026, with export risks and rand volatility adding uncertainty,” said Naik.

Diverging Trends: New vs. Used Vehicle Demand

NaTIS data shows new registrations rising 20% YoY in Q2 2025, led by Northern Cape, Free State and Northwest. In contrast, used registrations declined by 1.4%, reflecting pressure in that segment.

Across all vehicle sales, the Used-to-New Vehicle Registration Ratio rose to 3.2 in Q2, up from 2.5 in Q1, indicating a quarter-on-quarter increase in the relative share of used vehicle registrations. However, this remains below the 3.8 ratio seen through much of 2024, suggesting that new vehicles have regained some ground YoY. While used vehicles continue to dominate overall registrations, the market has shifted slightly back toward new vehicles compared to last year. This nuanced divergence presents opportunities for OEMs and dealer networks, while independent used dealers continue to face headwinds.

Exports Slump Amid Global Shocks

While domestic momentum improves, passenger vehicle exports fell 24.6% in Q2 2025 due to softer global demand and new US tariffs of up to 30%. Premium models, heavily reliant on the US and European markets, are under pressure, raising concerns for production, jobs, and investment.

Two-pot Withdrawals: Targeted Liquidity with Visible Impact

The September 2024 two-pot retirement reform injected liquidity into households, with evidence from the Bureau of Market Research suggesting a direct impact on mobility demand3, particularly in the used car market. While withdrawals were generally insufficient to fund deposits for new vehicles, they provided meaningful support to affordability-driven used vehicle purchases.

The reform is offering short-term relief rather than long-term wealth extraction, with withdrawals largely used for deposits, consumption, or debt repayment. Generational differences are evident: Millennials (aged 29 to 44) and younger Gen X (aged 18 to 28) are the most active claimants, while Baby Boomers withdraw minimally. Repeat withdrawals are becoming more common, suggesting both ongoing financial strain and the emergence of a recurring source of liquidity for entry-level and mid-market segments4.

“Two-pot withdrawals were not the only factor lifting sales,” noted Naik. “But the timing, scale and claimant profile suggest they acted as a meaningful catalyst for incremental used-car purchases.”

What Industry Players Should Do Next

Looking ahead, TransUnion advises that OEMs, dealers and lenders recalibrate strategies to balance domestic opportunities with external risks. Industry participants should align campaigns with liquidity cycles, planning promotions and stock availability around expected two-pot withdrawal windows.

Affordability must remain the priority, with a sharpened focus on value brands, certified pre-owned vehicles, and models that deliver a strong total cost of ownership. Financing solutions should also evolve, offering deposit support, trade-in boosters, and more flexible terms, while carefully monitoring repayment behaviour to manage post-purchase risk.

At the same time, leveraging data-driven insights, integrating credit and registration analytics to identify liquidity-sensitive buyers, preapprove customers, and track repayment performance, will be critical for sustaining growth in an uncertain environment.

“South Africa’s auto market is regaining momentum, but it’s a fragile recovery,” said Naik. “Those who time offers to policy-driven liquidity, sharpen affordability, and manage risk proactively will be best placed to capture growth.”

Read the full TransUnion South Africa Mobility Insights Report here.

ENDS

Notes to Editors: The Q2 2025 release is the second edition of the TransUnion South Africa Mobility Insights Report, formerly known as the Vehicle Pricing Index. The rebranded report now captures broader consumer, financing, and insurance insights across the mobility ecosystem.

Sources:

1 South African Reserve Bank (SARB)

2 TransUnion-South-Africa-CCI-Report-H2-2025-V9.pdf

3 Two-pot-claims-and-credit-data-FINAL.pdf

4 FAnews: Majority of two-pot withdrawals in the new tax year are repeat withdrawals; Moneyweb: Two-pot withdrawal: repeat claims surge; and Moneyweb, Two-pot payouts surge to R57B, with 4m withdrawals to date.

Read moreSouth African Automotive Market: Recovery Gains Traction but Headwinds Persist

Free State Government Keeps Forfeiting Funds

Location: News

The Free State government will forfeit R32 million to the National Treasury in the current financial year due to a lack of financial discipline – which is unforgivable in a province that is already under severe strain. This information came to light during a meeting with the Free State Legislature’s Finance Committee where the current […]

The post Free State government keeps forfeiting funds appeared first on Freedom Front Plus.

Read moreFree State Government Keeps Forfeiting Funds

South Africa’s Credit Market Expanded During Q2 2025 Amid Eased Interest Rates and Shifting Consumer Risk

Location: Business
  • Millennial consumers drove significant new credit card growth, although new card limits dropped significantly
  • Vehicle asset finance growth trend continued, with more than two thirds of loans originated by Gen Z and Millennial consumers
  • Eased interest rates drove year-over-year growth in home loan originations, although affordability pressures may be impacting performance

South Africans responded to a more favourable interest rate environment during Q2 2025, leading to increased new account originations across most consumer credit products, particularly for credit cards and vehicle finance. Home loan activity also showed signs of recovery, as consumers felt more confident in committing to longer-term credit obligations. Retail revolving loans were the exception, with origination volumes declining despite growth in balances.

These are some of the findings of TransUnion’s Q2 2025 South Africa Industry Insights Report, which also found that South Africans were managing their credit better, as delinquencies improved across most consumer credit products during the quarter.

Credit Card Market Continued Upward Trajectory

Credit card originations increased by a robust 36.5% year-over-year (YoY), underscoring this product’s relevance as a flexible financial tool for consumers seeking convenience and/or liquidity in what remains a challenging economic environment. Millennials (born 1980 to 1994) drove this growth, with originations in this cohort making up 47.6% of all originations in the period.

Lenders seeking to expand market share continued to extend credit to consumers in higher-risk prime and below risk tiers[1], with originations to subprime consumers increased by 49.2% YoY. They balanced this growth among higher-risk borrowers with smaller credit limits. The average credit limit on new credit cards decreased by 19.5% YoY during the quarter.

Delinquency trends showed mixed results. Credit card balance-level delinquency rose slightly to 18.1%, up 13 basis points (bps) YoY, indicating a marginal increase in overdue balances. In contrast, account-level delinquency rates declined by 32 bps YoY to 12.1%. This decline in account-level delinquency suggests that while some consumers accumulated larger balances, many were able to make payments to keep their accounts active.

“The latest credit cards trends reflect strategic credit use and disciplined repayment behaviour among a financially stretched borrower base,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “The combination of rising origination volumes and shrinking new credit lines suggests that lenders are working to balance growth with prudent risk management. Lenders may need to refine their segmentation strategies, enhance early warning systems, and tailor credit line management to sustain portfolio health while supporting customers’ financial needs.”

Vehicle Asset Finance Shows Continued Growth

Vehicle asset finance originations increased by 21.0% YoY in Q2 2025, and average new loan amounts increased by 3.5% while the number of active accounts increased by 2.1% YoY. Growth was mainly driven by Gen Z (aged 18 to 28) and Millennial (aged 29 to 44) consumers who accounted for 64.3% of originations.

Outstanding balances grew by 7.6% YoY, and average balances have increased by more than 30% over the last five years, reflecting both higher vehicle prices and a sustained trend toward longer loan terms, which slows loan balance paydown rates. Loan terms granted during Q2 2025 averaged 74 months, up from 73 months in Q2 2024 and 72 months in Q2 2023. Longer loan terms, while slowing balance paydown, result in lower monthly payment amounts, which help consumers manage monthly cash flow in a high-cost environment.

Younger consumers are beginning to look for more ways to enter the vehicle market, including taking advantage of more cost-effective imported vehicles. However, 65% of vehicle finance originations were made by repeat buyers during Q2 2025, suggesting that access to vehicle finance remains limited for new entrants. At the same time, lenders need to be mindful of rising risk levels: in the second quarter of 2025, 44% of new-to-vehicle finance consumers fell into the subprime risk tier. These trends highlight the need for lenders to design credit products that support younger buyers, while ensuring responsible credit practices are upheld.

Account-level delinquencies for vehicle asset finance improved by 24 bps YoY to 5.1%, demonstrating that repayment behaviour for this product remained relatively stable, and that the overall risk profile of this portfolio is improving.

“For vehicle finance lenders, the rise in originations alongside modest growth in loan amounts suggests an opportunity to support demand while maintaining portfolio discipline,” said Hatea. “The improvement in delinquency rates is encouraging, but ongoing monitoring will be essential as economic recovery remains uneven. Vehicle finance lenders may benefit from refining pricing models, reassessing vehicle segmentation strategies, and balancing growth with prudent risk management.”

Home Loan Market Responds Positively to Eased Interest Rates

Lower interest rates, moderating inflation and improved real wage growth led to stronger consumer sentiment, giving lenders an opportunity to re-engage with consumers seeking home loans. New home loan account originations increased by 6.8% YoY during Q2 2025, showing early signs of recovery after declines in growth over previous quarters.

Favourable interest rate conditions and enhanced credit access drove broader access to home ownership this quarter, with 51% of home loans granted to individuals taking a home loan for the first time — the highest proportion in over five years. Among these, 56% were Millennials and 24% were Gen Z.

Delinquency trends showed mild deterioration, with the account-level delinquency rate increased by 29 bps to 7.5%. These movements suggest that while the market is stabilising, repayment stress remains a concern.

“These trends indicate a home loan market that is stabilising, but not without risk,” said Hatea. “For home loan lenders, the uptick in originations presents an opportunity to re-engage with the market, but rising delinquency rates underscore the need for vigilance. Portfolio strategies may need to shift toward enhanced consumer profile assessments, proactive risk monitoring, and targeted engagement with borrowers showing early signs of strain. As the market navigates this transitional phase, balancing growth with resilience will be key.”

 Table 1: Key South African Credit Market Metrics (Q2 2025 vs Q2 2024)

Product

YoY origination growth

Serious account-level delinquency rate*

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

36.5%

12.1%

-32 bps
Bank personal loan

2.2%

25.9%

-72 bps
Non-bank personal loan

18.8%

41.3%

256 bps
Clothing accounts

6.5%

25.9%

-265 bps
Retail instalment

21.4%

25.5%

-238 bps
Retail revolving

-6.3%

14.9%

-251 bps
Home loans

6.8%

7.5%

29 bps
Vehicle finance

21.0%

5.1%

-24 bps

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

[1] 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 Expanded During Q2 2025 Amid Eased Interest Rates and Shifting Consumer Risk

Nearly 7 in 10 South Africans Remain Optimistic About Finances Amid Rising Costs and Fraud Risks

Location: Business
  • 68% of South Africans are optimistic about their household finances in the next 12 months, despite persistent inflationary pressures
  • 75% expect their household income to increase over the next year, but 36% expect to be unable to meet their bill and loan payments in full
  • Younger generations show the strongest engagement with credit, with Gen Z and Millennials most likely to use buy now, pay later (BNPL) services.59% of consumers said they were targeted by fraud recently, with money/gift card scams the most reported scheme

South Africans are managing cost-of-living challenges with a blend of resilience and caution, according to TransUnion’s Q3 2025 Consumer Pulse Study*. The findings reveal that while inflation and affordability remain top concerns, many consumers are maintaining financial optimism while adopting protective behaviours, especially in credit usage and cyber security.

“South Africans are signalling confidence, but it’s a confidence shaped by awareness of risk,” said Ayesha Hatea, director of research and consulting at TransUnion. “Consumers are balancing optimism with caution, adjusting spending habits, making informed credit decisions, and staying vigilant to fraud.”

Financial Confidence, but Rising Costs

Nearly seven in 10 (68%) of South Africans are optimistic about their household finances over the next year, while 75% expect their income to increase during that period. However, this optimism exists alongside strain: 36% of consumers say they expect to be unable to pay at least one of their current bills or loans in full. South Africans were concerned about the impacts of price increases, most particularly for groceries (82%), utilities (60%), fuel for cars (52%) and medical care (52%).

Younger Generations Shape Credit Behaviour

Generational differences continue to define financial habits. Nearly half of Gen Z (18-28 years old, 48%) and Millennials (29-44 years old, 43%) reported they’ll apply for new credit or refinance existing credit in the next year, compared to far lower intent among Gen X (45-60 years old) and Baby Boomers (61-79 years old).

Younger consumers are also driving the adoption of buy now, pay later (BNPL) services with 55% and 59% of Gen Z and Millennials saying they’ve used BNPL in the last 12 months compared to 39% and 19% of Gen X and Baby Boomers, respectively. Overall, 15% of South Africans who have used BNPL in the last year said they did so to afford a larger purchase (furniture, appliances or cars), highlighting both its appeal and potential risks in a high-inflation environment.

Cautious Credit Intent Amid Affordability Pressures

While the vast majority of South Africans (93%) say that access to credit and lending products is important to be able to achieve their financial goals, many remain hesitant to take on new financial products. In fact, 38% said they’ll apply for new credit or refinance existing credit in the next year. Credit awareness among South African consumers remains strong, with 70% agreeing that access to credit can unlock new opportunities and improve quality of life.

This sentiment aligns closely with TransUnion’s financial inclusion priorities, particularly as alternative data becomes a more prominent tool in assessing creditworthiness. The study reveals that consumers are increasingly aware of how credit affects their daily lives, which highlights the importance of expanding access to credit through inclusive data strategies, especially for those traditionally excluded from formal financial systems.

Among those planning to apply for new or refinance existing credit in the next year, unsecured credit products such as personal loans (30%), new credit cards (29%) and BNPL services (22%) are the most popular credit types they said they’ll apply for. In contrast, a lower percentage said they’ll apply for secured credit options like a new car loan or lease (18%) or home loans (16%), highlighting a cautious approach to larger, long-term borrowing.

Nearly Two-Thirds Report Being Targeted with Fraud

Fraud attempts and scams remained high in Q3: 59% of South Africans said they were targeted by email, online, phone call or text messaging fraud in the last three months, the same percentage as Q2. Among those who said they were targeted, the most reported scheme was money/gift card scams (37%), with phishing (28%) and smishing (28%) also widespread.

With the persistence of attacks, consumers are proactively taking action. In fact, 54% of all surveyed said they changed passwords, 35% checked their credit report for any signs of fraudulent activity against their profile, and 27% modified their login to secure login without passwords options or added multi-factor authentication in the last 60 days in response to cyber security concerns.

“Fraudsters are evolving, and consumers are trying to keep pace,” said Hatea. “This is why education and accessible protection tools are so critical in building long-term trust in digital engagement.”

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

* TransUnion’s online survey of 966 South African adults was conducted June 17– 31, 2025.

Read moreNearly 7 in 10 South Africans Remain Optimistic About Finances Amid Rising Costs and Fraud Risks

Creditworthy and Misunderstood: New Data Challenges Lender Assumptions About Young Consumers

Location: Business

South Africa’s younger credit-eligible consumers present significant growth opportunities for lenders if they can overcome persistent market assumptions that currently shape risk appetite and acquisition strategies.

These assumptions include that younger consumers do not value credit, they are disengaged from the credit market, are irresponsible with debt, have low appetite for new credit, lack loyalty to lenders, and struggle to meet payment obligations.

They could also partly explain South Africa’s low 13% credit card market penetration among both Millennials (aged 29 to 44) and Gen Z (aged 18 to 28). Furthermore, Gen Z consumers adopt credit cards and personal loans at half the rate that Millennials did at the same age, suggesting limited growth for lenders as these consumers age.

“Our research suggests systemic barriers to credit access in South Africa, rather than a lack of demand,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “It also highlights that lenders have opportunities to innovate in product design, onboarding and education to empower these consumers to manage everyday expenses and unexpected financial needs as they progress towards achieving key life milestones.”

To challenge perceptions about younger consumers, TransUnion South Africa conducted a focused study[1] to test lenders’ perceptions, analysing participation, engagement and repayment behaviour among the country’s 4.3 million credit-active population aged 18 to 30.

Myth 1: Younger consumers don’t value credit

More than six in 10 (62%) younger consumers believe that access to credit is important to achieve their financial goals[2], with 76% saying that credit can give them access to new opportunities that could lead to a better quality of life. Younger consumers’ favourable perception of credit exceeds that of older consumers, 57% of whom believe access is important, and 71% of whom believe that access to credit can unlock new opportunities. However, less than a quarter (24%) of young consumers view credit as a risk to prudent financial management.

“Younger consumers increasingly see credit as a way to achieve their financial goals – even more so than older consumers,” Hatea said. “With most disagreeing that applying for credit signals poor financial management, it’s clear that opportunities exist for segment-focused products supported by financial literacy initiatives.”

Myth 2: Younger consumers are disengaged and don’t participate in the credit market

Nearly four in 10 (39%) young consumers feel that they have sufficient access to credit and lending products, with 49% believing that they would be approved for a credit product if they needed one.

It’s worth noting that, over time, consumers’ choice of credit product shifts. Reviewing credit card originations across a six-year period showed similar trends across time: 2% of 18 year old credit active consumers hold a credit card, compared to 19% of 30 year olds. Their participation in secured credit products increases with age, reaching parity with the general population by 30 and reflecting life stage realities like income, affordability and asset ownership, rather than disengagement.

“These shifts show that young consumers are engaged with the credit market, particularly with unsecured products, but their participation evolves across product types and life stages,” Hatea said.

Myth 3: Younger consumers are irresponsible in leveraging debt

Credit utilisation and average balances are well aligned with risk-based access that improves with age. At age 21, 95% of consumers are classified as subprime, dropping to 74% by age 30, reflecting a maturing credit profile.

Despite limited access, younger borrowers demonstrate measured usage: the average credit card balance at age 21 is R11,000, rising to R24,000 by age 30, while utilisation among near-prime consumers increases from 58% to 78% over the same age range.

“These trends highlight responsible engagement with credit and clearly refute the myth that younger consumers overextend their credit exposure, or are reckless with credit,” Hatea said. “As young consumers gain access to larger loan amounts, they move into better risk categories, reflecting greater lender trust in recognition of responsible repayment behaviour.”

Myth 4: Younger consumers have a low appetite for credit, and lack loyalty to lenders

While one third (33%) of the general population intends to apply for new credit within the next year, this increases to 45% for Gen Z consumers. Additionally, 36% of these consumers inquired about new credit over the six years studies, compared to 28% of all consumers. However, only 3.4% of younger consumers return to their first lender for new credit – similar to the 3.6% average across all consumers.

“The data shows that younger consumers do indeed have appetite for credit, while revealing that South African consumers in general are not particularly loyal to their credit providers,” Hatea said. “To build loyalty and retain younger consumers, lenders should invest in early-stage experiences, personalised engagement, and relevant products that build lasting relationships.”

Myth 5: Younger consumes struggle to keep up with their payment obligations

Interestingly, younger consumers show significantly lower risk of delinquency at 30 days past due (DPD) in the first year after opening credit cards, although this rises as they get older: there was a 17% delinquency rate among near prime 18 to 22 year olds, while 30 year olds displayed a 24% delinquency rate.

However, for non-bank loans and bank loans, younger consumers (18 to 24 years old) show slightly higher delinquency rates than older consumers, although younger consumers, especially those aged 23 to 25, perform better than the industry average. This indicates that lender type influences delinquency outcomes, and that younger borrowers may respond differently to the structure, support, or perception of a lender’s credit.

“Younger consumers are effectively managing their loans when compared to industry averages across most products,” said Hatea. “They’re not broadly higher risk, but they may be more vulnerable in certain lending contexts, particularly non-bank personal loans, where product design, support, or affordability may not be well aligned to their needs. Higher delinquency rates on non-bank personal loans can be addressed through early default detection tools.

“By focusing on education, wallet growth, loyalty, alternative data to measure risk, and proactive risk management, lenders can support younger consumers and drive long-term, sustainable growth among these consumers and in the broader credit market,” she said. “Well-managed credit can also be a catalyst for broader economic growth in South Africa.”

[1] TransUnion South Africa conducted a focused study to test lenders’ perceptions of consumers aged 18 to 30, analysing participation, engagement and repayment behaviour among the country’s credit-active population in this age group. Data was studied across four time frames (September in 2018, 2022, 2023 and 2024), and included age, risk score, open products in wallet, credit lines, average balances by product and credit utilisation at commencement of the study, new products opened, line assignments and opening loan amounts for six months, and delinquency rates on newly opened products for 12 months. These were compared to overall market averages to evaluate gaps and opportunities.

[2] According to TransUnion’s Q2 2025 Consumer Pulse Survey of 922 adults aged 18 or older, residing in South Africa conducted May 5–25, 2025 by TransUnion in partnership with third-party research provider, Dynata.

Read moreCreditworthy and Misunderstood: New Data Challenges Lender Assumptions About Young Consumers

TransUnion Study Reveals Key Insights Into South Africa’s FinTech Borrowers as Market Poised for Growth

Location: Business
  • TransUnion analysis reveals actionable insights for FinTech lenders seeking to navigate market complexities to achieve growth targets
  • FinTech lending is not the main gateway to financial inclusion, with most consumers choosing a clothing account as their first credit product
  • FinTech borrowers are loyal when it comes to subsequent products, but FinTech lenders are lower in consumers’ payment hierarchy than other lender types

TransUnion’s latest research into South Africa’s FinTech lending market reveals critical insights into borrower behaviour, loyalty and risk based on an analysis of 4.3 million South Africa consumers. The study highlights patterns that present both opportunities and challenges when navigating a rapidly digitising credit ecosystem.

South Africa’s FinTech sector is undergoing rapid transformation, signalling a major shift in how consumers will engage with credit in the next five years, and beyond. As digital adoption accelerates, lenders will need to adapt their approach to South African consumers if they’re to attract, retain and grow relationships with digitally engaged borrowers.

Emerging FinTechs are offering diverse solutions such as buy now, pay later (BNPL) loans with interest free payments, flexible financing for small and medium enterprises, point-of-sale credit and insurance coverage. Financial services are now more accessible than ever before. However, it’s essential that the lenders behind these solutions understand who is using them, how they engage with credit, and whether borrowers’ loyalty can help drive sustainable growth.

“As competition intensifies and regulatory frameworks evolve, lenders must go beyond product innovation and develop a deeper understanding of consumer behaviour,” said Ayesha Hatea, director of research and consulting at TransUnion South Africa. “Our study offers a data-driven lens into the FinTech borrower profile, helping lenders build loyalty, manage risk, and drive inclusion.”

TransUnion analysed South Africans who held at least one open FinTech credit obligation in Q4 2024, including long-term personal loans, short-term personal loans and credit cards, to learn more about the consumers driving growth in the sector. The study examined risk profiles, delinquency trends, product breadth, and loyalty patterns among FinTech borrowers. Further, the study compared those characteristics to similar-risk consumers using traditional lender products only (non-FinTech borrowers[1]), providing a deeper understanding of growth opportunities for South Africa’s credit market.

Five Themes Shaping FinTech Lending Strategy

1.     FinTechs are not yet the main gateway to financial inclusion.

Despite South Africa’s high mobile penetration[2], 69% of New-to-Credit consumers – those with no prior reported credit history – enter the market via retail accounts, with clothing accounts being the most common first product. FinTechs have an opportunity to reposition themselves as enablers of financial inclusion by partnering with retailers and mobile ecosystems to reach underserved segments.

2.     FinTech borrowers are concentrated in below prime risk tiers[3].

While many FinTech borrowers have experience managing credit, 95% of FinTech borrowers with 0–1 month loans are in below prime risk tiers, compared to 29% for bank borrowers and 69% for non-bank lender borrowers. For 2–12 month loans, 94% of FinTech borrowers are below prime, in contrast to 58% for banks and 50% for non-banks. This highlights greater risk exposure among the FinTech borrower base and suggests that FinTech lenders could benefit from leveraging trended and alternative data to better predict repayment risk and reduce delinquency rates, particularly among below-prime borrowers.

3.     FinTech borrowers are not all underserved.

Among 0–1 month term borrowers, 44% of FinTech consumers already hold two or three credit products and 27% hold four or more, debunking the assumption that FinTech borrowers have limited access to credit. Additionally, more than 56% of FinTech personal loan borrowers hold credit products with non-FinTech lenders. These multi-lender relationships underscore the need for lenders to view borrowing patterns holistically and better understand the reasons why borrowers may be seeking credit from different lender types, in order to develop strategies for capturing more of their customers’ wallets.

4.     FinTech borrowers underperform on repayments.

While there are no material differences by lender type for longer-term loans, there are significant differences for 0-1 month loans. This is an important consideration as these shorter-term loans are more likely to be used by borrowers earlier in their credit journeys when they are potentially more financially vulnerable. After controlling for borrower risk score, delinquency rates (consumers 2+ months in arrears on a loan) were highest among FinTech borrowers: The consumer-level delinquencies were 74% for 0–1 month loans from FinTechs compared to lower rates for bank loans (53%) and non-bank lender loans (53%), underscoring the need for enhanced risk management strategies tailored to the FinTech segment.

5.     FinTech borrowers are loyal to FinTech lenders

TransUnion’s research provides compelling evidence of borrower loyalty within the FinTech lending ecosystem. Among consumers who originated a 0–1 month personal loan, 65% opened another 0–1 month loan within 12 months, and 93% of those chose a FinTech lender. More than one fifth (21%) of these borrowers progressed to a 2–12 month loan, with 80% remaining with FinTech providers.

Among consumers who started with a 2–12 month personal loan, 95% opened another 2–12 month loan, with 60% choosing a FinTech lender. In addition, 85% of these borrowers also opened a 0–1 month loan, and 38% did so with FinTech lenders. These patterns demonstrate a strong preference among borrowers to remain within the FinTech category, even as they take loans over longer time periods. This loyalty presents a strategic opportunity for FinTech lenders to deepen relationships through personalised engagement, targeted product offerings, and proactive risk management.

However, loyalty in product originations does not necessarily translate into repayment prioritisation. When consumers hold loans with both FinTech and non-FinTech lenders, they tend to prioritise repayments to traditional institutions. Among consumers with 2–12 term personal loans from both FinTech and non-FinTech non-bank lenders, delinquency measured as 1+ month in arrears was 33% for FinTechs, compared to 26% for non-FinTech non-bank lenders. Similarly, for those with loans from both FinTechs and banks, delinquency was 30% for FinTechs versus 28% for banks.

The takeaway for lenders is that while FinTech borrowers are loyal in terms of repeat borrowing, they may deprioritise FinTech repayments when under financial pressure. This highlights the need for FinTech lenders to strengthen their engagement strategies, build trust, and implement early intervention tools to improve repayment outcomes and long-term value.

“If lenders are to benefit from the anticipated growth in the FinTech lending market, it’s essential that they offer financial literacy and awareness education to help consumers understand how responsible credit use can support their financial goals. Once consumers have opened FinTech-issued products, lenders can activate lifestyle triggers to anticipate consumer progression so that they can deliver timely, relevant engagement to drive loyalty and long-term value. This can be further supported by deploying predelinquency models to identify early signs of consumer stress, and to initiate recovery efforts before risk escalates,” said Hatea.

[1] FinTech consumers were those with an open FinTech long-term personal loan, short-term personal loan, or credit card. Non-FinTech consumers were a control group with no FinTech obligations of any type in their history, who held a long-term personal loan, short term personal loan or credit card from a non-FinTech lender

[2] 118,600,000 connections across 60,690,000 people https://datareportal.com/reports/digital-2024-south-africa

[3] Scores are based on TransUnion’s CreditVision® generic scoring methodology. Risk distribution key: subprime (0-625), near prime (626-655), prime (656-695), prime plus (696-720), super prime (721-999).

Read moreTransUnion Study Reveals Key Insights Into South Africa’s FinTech Borrowers as Market Poised for Growth