'More than one loan': Why more South Africans are turning to credit to make ends meet

South African households are increasingly relying on credit to cope with the rising cost of living, according to recent data from Statistics South Africa. Consumer inflation surged to 5% in June 2026, the highest level since June 2024, driven by soaring transport, housing, and utility costs. The Competition Commission's Cost of Living Report highlighted that essential service prices, such as electricity and water, have climbed significantly over the past six years, outpacing overall inflation which stood at 30% during the same period.

In response, more consumers are turning to credit, with the Credit Association of South Africa warning that it's not just large loans causing financial strain – multiple smaller commitments, including store accounts and personal loans, are also contributing to repayment difficulties.

According to the Old Mutual Savings & Investment Monitor, the proportion of working South Africans holding personal loans increased from 54% in 2025 to 64% in 2026. The rise in informal borrowing is equally concerning, with loans from mashonisas or loan sharks climbing from 12% to 19%. Besides formal lenders, consumers are also borrowing from family and friends (28%) and stokvels (16%), indicating a growing reliance on informal credit sources.

FNB Consumer Education Operations Manager Pearl Cele emphasized that credit comes with costs, including interest and potential fees, and urged consumers to borrow responsibly. She advised obtaining quotes, understanding loan terms, and avoiding borrowing more than necessary to prevent overextending finances.