Improving economic fundamentals but continued credit stress, particularly among seniors

Retailers speak to the final quarter of the year as the ‘golden quarter’. Last year the credit market closed on a strong note, driven by seasonal demand from Black Friday, festive shopping, and summer spending. Economic sentiment also improved relative to prior quarters – unemployment continued to fall and the repo rate dropped again, although GDP growth forecasts held at a modest 1% – 1.4%, inflation edged higher and retail sales, while up on the previous year, were muted.

Consumer credit markets expanded significantly year-on-year, with strong growth in both active accounts and outstanding balances, with older South Africans accounting for a notable share of that growth.

Every quarter, Eighty20, in collaboration with Xpert Decision Systems (XDS), releases the Credit Stress Report. The 2025 Q4 Credit Stress Report examines consumer credit behaviour and the key economic events that had an impact on South Africans over the period.

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Economic Context

Highlights of the Fourth Quarter
South Africa experienced some favourable economic indicators

• Vehicle sales hit a ten-year high
• South Africa’s credit rating was upgraded from BB- to BB
• Petrol prices fell by 1.3% QoQ driven by a decline in oil prices
• FNB/Bureau for Economic Research Consumer Confidence Index rose to -9
• There was a further drop in the Repo rate to 6.75%
• The rand continued to perform favourably against the USD, strengthening by nearly 4% QoQ

Credit Market Dynamics

Credit take up traditionally increases seasonally in the fourth quarter, and this season was no different. Total open loans grew by more than a million in the quarter (1.9%) to 55 million loans while outstanding balances grew by R44bn (1.7%) reaching R2.66 trillion.

Over‑indebtedness continued to increase, with 40% of credit active South Africans in default (3 or more months in arrears) on one or more loans. The number of defaulters ticked up marginally and the percentage of loans in arrears increased slightly, marking the first increase in this proportion since 2023 Q1.

The total sum of overdue balances grew in the quarter by R12bn, which is 6% growth for the quarter, and more than 12% YoY to R224bn (8.4% of total outstanding debt). This rapid growth is concerning and highlights widespread financial stress across segments – including seniors.

Seniors and their credit holdings

This quarter, Eighty20 did some in-depth analysis of the seniors market, specifically two Eighty20 National Segmentation segments, the fairly affluent Comfortable Retirees who have managed to save for retirement, and the Humble Elders who are retiring with SASSA pensions, or reliant on family. Together, these segments took out approximately 840 000 new loans in Q4, (up 15% QoQ) but with dramatically different credit holdings.

A few metrics paint a worrying picture of senior’s credit health, highlighting two concerns: a sustained rise in the number of defaulters and a steady accumulation of overdue balances, both of which appear to be accelerating rather than stabilising.

While the total number of defaulters across the general population has declined nearly every quarter since mid-2023, seniors have moved sharply in the opposite direction. Over the past six quarters, defaults among seniors have grown significantly, with Comfortable Retirees seeing a particularly sharp spike in the most recent quarter.

For all credit active South Africans overdue balances have been rising consistently, with the trend most pronounced this quarter in VAF and home loans. Comfortable Retirees have seen overdue balances grow at a pace that outstrips the broader population, and Humble Elders have recently begun tracking a similar trajectory.

Download the Credit Stress Report

The 2025 Q4 Credit Stress Report reflects an economy of contrasts. Encouraging macroeconomic developments in the form of a stronger rand, falling repo rates, and a credit rating upgrade offered consumers some relief during the quarter. Yet over-indebtedness continued to rise, overdue balances accelerated, and senior credit health deteriorated markedly.

Meanwhile, year‑end retail sales grew but lost momentum, reflecting cautious consumer behaviour despite supportive macroeconomic shifts. The next Credit Stress Report will assess how these economic fundamentals – together with the 2026 Budget – shape consumer confidence and financial resilience heading into the new year.

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