Johannesburg, South Africa,

South Africa’s Consumer Credit Landscape Shows Varying Trends in Demand and Supply

  • Clothing loans, personal loans, and home loans led growth in new credit activity during Q3 2023, while credit card and vehicle loan originations slowed down
  • Consumers continued to build credit balances at a healthy rate, against a backdrop of strong growth in the retail sector
  • Portfolio performance in unsecured credit products continued to demonstrate resiliency, while secured products were impacted by higher interest rates and affordability challenges

TransUnion’s newly released Q3 2023 South Africa Industry Insights Report showed a mixed picture of demand and supply across lending products. Consumers generally remained resilient during a quarter when economic indicators such as inflation and the South African Reserve Bank’s repo rate were relatively stable.

Originations – a measure of new accounts opened – saw the strongest Q3 2023 year-over-year (YoY) growth in personal loans (up 7.5%) and clothing accounts (up 11.2%), while new credit card originations declined (down 6.3%) compared to the same quarter in 2022, as did retail revolving loans (down 10.3%) and vehicle loans (down 7.5%).

“Declines in some product originations are likely driven by consumers’ caution in the current high interest rate environment,” said Lee Naik, CEO of TransUnion Africa. “However, the increase in originations among below prime consumers may be a sign of distressed borrowing to meet financial needs.”

Strong growth in retail clothing demand and supply

Strong clothing account originations (up 11.2% YoY) aligned with the broader expansion seen in the retail sector, with sales rising 0.9% over the quarter. This growth was largely driven by increased sales of textiles, clothing, footwear, and leather goods, and is the first increase in the sector since November 2022[1]. Notably, the average limit on new clothing accounts grew substantially, increasing 43.5% YoY.

In the personal loan sector, non-bank lenders were responsible for 80.4% of new personal loans extended in Q3 2023 – a 2.8% increase from the previous year’s corresponding quarter. Concurrently, the average value of new loans granted overall declined by 21.5% YoY, a trend attributable to the decreasing share of personal loans provided by traditional banking institutions, which focus on consumers with higher credit scores and generally issue higher average opening loan amounts.

Although the total number of active credit cards in market increased, growing 1.3% YoY, origination levels in Q3 2023 were down compared to the same period last year. The findings of the Q4 2023 TransUnion Consumer Pulse Study also revealed that among those South Africans who intended taking out new credit products, 29% said that they were going to apply for a credit card – a decline of seven percentage points from the previous quarter.

Generation Z consumers (born 1995 – 2010) were the only generation in which credit card originations grew by 4.7%, signalling a growth opportunity for lenders intent on building loyalty among younger consumers starting their credit journey.

Consumers leveraged credit at a healthy rate

The third quarter of 2023 saw outstanding consumer credit balance growth of 5.6% YoY, with all financial products contributing positively except for bank and non-bank personal loans, where average balances per account decreased by 3.7% YoY. Average outstanding balances per account for clothing accounts increased by 5.4% YoY, while credit card increased by 7.4% YoY, retail revolving increased by 5.7%, and retail instalment increased by 6.6% over the same period.

This indicates a trend of increased credit utilisation among clothing account holders, which aligns with statements from retailers that have noted an uptick in credit bookings impacting retail sales positively. The balance growth suggests consumers are increasingly leveraging credit to make everyday purchases.

Furthermore, clothing accounts saw significant growth in average new credit limits across risk tiers YoY in Q3 2023. Given that clothing accounts are typically opened by borrowers in below prime risk tiers, this highlights that lenders are feeling more confident in extending credit to riskier consumers. This confidence is potentially driven by the fact that account-level and balance-level delinquencies on clothing accounts showed marginal improvements compared to the previous year, decreasing by 20 and 130 basis points YoY, respectively.

"As South Africans apply for and gain access to credit products, they’re leveraging them effectively to navigate the current challenges of the South African economy,” said Naik. “Continuing to manage their debt judiciously can only have positive outcomes, including an improved credit score that will facilitate access to credit products that will further enhance their lifestyles, such as vehicle loans and home loans.”

Portfolio performance for unsecured products demonstrates resilience

Overall, delinquencies for unsecured products, including credit cards, personal loans and retail accounts showed a positive and resilient consumer performance story in the recent quarter, with serious account-level delinquencies declining. At the same time, secured products saw increases in missed payments, potentially as a result of higher interest rates and affordability challenges for homes and vehicles. While South Africans generally showed an increased commitment to making payments regularly, there are pockets of vulnerability that lenders need to assess and address.

For consumers carrying certain debt products that are vulnerable to interest rate increases, rate escalations between November 2022 and May 2023[2] exerted financial strain, pushing them toward delinquency. This is evidenced by a notable uptick in serious account-level and balance-level delinquencies (90 days past due) on home loans, up 150 and 200 basis points YoY, respectively, in Q3 2023.

Despite worsening delinquency performance, the home loan market displayed growth, with loan originations increasing by 3.0% YoY. This implies that consumers committed to purchasing homes in the current environment may be largely unaffected by the increased cost of credit, suggesting a more affluent demographic.

“The South African consumer credit landscape in Q3 2023 is a study in contrasts,” said Naik. “While some sectors, such as clothing accounts and personal loans, are expanding their accounts in book, others like vehicle finance face challenges due to affordability challenges and the impact of higher interest rates. Across all sectors, risk management remains crucial, as does the need for targeted strategies to sustain confident growth while managing portfolio health.”

Table 1: Summary of Q3 2023 Metrics for Major Consumer Credit Products  


YoY % Change in Originations1

YoY % Change in Total Outstanding Balances

Serious Account Delinquency Rate2

YoY Basis Points (bps) Change in Delinquency Rate

Credit card




-110 bps

Personal loans3




-110 bps

Home loans




+150 bps

Vehicle asset finance




+70 bps

Clothing accounts




-20 bps

Retail revolving




-560 bps

Retail instalment




-390 bps

1 Originations for Q3 2023 compared to Q3 2022 
2 Account-level serious delinquency rate, measured as a percentage of accounts three or more months in arrears
3 Includes both bank-issued, and non-bank issued personal loans 


[1] South Africa Retail Sales YoY (

[2] South Africa Interest Rate (


Note to editor: 

* 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). 

** Unsecured lending products are those where a loan is not tied to an asset. Examples of unsecured lending products include credit cards and personal loans, among others.