Capitec is opening the taps
Capitec is lending more aggressively in South Africa despite the weak economic environment across the nation.
Speaking at the group’s annual results for the six months ended 31 August 2025, new Capitec Group CEO Graham Lee noted that credit sales growth in the personal banking division reached 5.6% in August 2025.
This is well above the 4.0% and 4.5% credit sales growth seen in August 2023 and August 2024, respectively.
Lee noted that the rise comes without the group changing its risk appetite, with it instead using data and algorithms to create better offers for clients.
This has led to a 40% increase in credit applications via its personalised offers. The actual approval rate has remained stable due to the unchanged risk appetite.
Sales to clients earning over R50,000 per month total R6 billion, taking up to 20% of the group’s credit as the group looks to high-earning customers.
Capitec’s loans and advances in South Africa have risen from R85 billion in August 2024 to R93 billion in August 2025.
The group’s credit card sales increased by 81% to R3.5 billion, while its purposeful lending, which includes vehicles, home improvement and education, rose by 188% to R1.8 billion.
Despite the increase in credit sales, Lee noted that the book is healthy. There has been a 9.5% decrease in rolls into default and a 7.7% decrease in rolls into debt review.
Moreover, the South African operations’ credit loss ratio decreased from 8.3% in August 2024 to 8.1% in August 2025.
Despite the personal banking division’s improvement, the group saw its overall credit loss ratio, including AvaFin, increasing to 7.9% (2024: 7.6%).
AvaFin added R761 million to the charge over the six months compared to R305 million for the four months ended August 2024, as their loan books grew by 48%.
Where is it focusing
In his presentation, Lee noted that South Africa’s economy is currently showing a tale of two stories.
On one hand, the formal sector has been characterised by extreme pressures amid the low-growth economic environment.
He noted that retrenchment letters have increased dramatically across the retail, private healthcare and industrial sectors of South Africa.
Although there have been some green shoots for the economy, such as improved freight volumes and higher solar numbers, the formal economy still remains hamstrung.
However, the other hand tells of an informal sector that is starting to see a massive rise in earnings.
While fully banked Capitec customers have seen a 7% increase in salaried employees, average non-salary inflows across South Africa are up 15%.
There are currently four million non-salary earners across Capitec’s fully banked operations, which Lee said shows the rise of entrepreneurs and “hustlers” in the economy.
Speaking to BusinessTech, Lee said that Capitec has historically been a lender to the formal economy across South Africa.
Although lending to the formal economy will not cease, the group is set to focus more heavily on capturing the informal economy of entrepreneurs.
However, this is not a pivot, as the group looks to add the 52% of South Africans living in rural areas and townships to its existing formal employee customers.
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