South Africa’s richest people are drowning in debt
South Africa’s richest people are spending close to half of their income on debt instalments.
This is according to the latest Credit Stress Report from Eighty20 for the second quarter of 2025.
The quarter saw contracting signals for consumer finance, with improvements in petrol prices, inflation and consumer confidence leading to the strong year-on-year growth in loan numbers since Covid.
That said, the overdue balance for some loan products has significantly increased, with the growth in home loan and credit card overdue balances especially concerning.
Eighty20 also noted an increase in the number of defaulting loans for the first time since early 2023.
The overall instalment to net income ratio for all credit-active South Africans was 28% in Q2 2025. This means over a quarter of net income is spent on servicing debt.
This burden is most significant for the Heavy Hitters, with 48% of their monthly income going to instalments. Heavy Hitters refer to South Africa’s top 5% of earners.
There were roughly 5,500 new-to-credit individuals in the Heavy Hitter segment, which accounted for 13.5% of all new loan balances for the quarter.
The segment’s total loan balances increased by 1.4% quarter-on-quarter to R1.7 trillion, accounting for 65% of the country’s overall debt.
Home loans made up the majority of debt for the segments with a balance of R1 trillion, an increase of 1.1% quarter-on-quarter.
Total overdue balances on home loans are up to R11.8 billion (4.6% quarter-on-quarter), contributing to the segment’s 3.3% quarter-on-quarter increase in total overdue balances.
Not the only one
Middle-class workers also spend a large amount of their income on debt repayments, at 37%.
This is a large segment of around 3.6 million people, but it doesn’t have many new entrants to credit.
The segment took out 1.1 million in new loans this quarter, at a 12% quarter-on-quarter increase, with the majority being unsecured.
The total balance of unsecured loans increased marginally by 0.2% quarter-on-quarter to R132 billion.
Overdue balances increased overall by 0.8% quarter-on-quarter, driven by a 1% quarter-on-quarter increase in credit card balances and a 4% quarter-on-quarter increase in home loan overdue balances.
Elsewhere, the Mass Market pays 19% of their income towards debt, and saw about 340,000 new to credit applications, who took out 405,000 loans, more than half of which were retail.
Almost all of the 2 million new loans taken out by the segment in Q2 were retail and unsecured.
The segment’s number of credit card holders jumped by 7% quarter-on-quarter to 1.3 million, with credit card overdue balances increasing by 6% quarter-on-quarter to R5 billion.
Despite the increased number of people using credit in the mass market segment, the percentage of defaulters decreased 0.3% quarter-on-quarter to 52.5%.
Lastly, Comfortable Retirees now spend 22% of their monthly income on servicing debt, marking an increase from the 21% seen a year ago.
Despite their increased age, the segment saw roughly 5,000 new-to-credit individuals, accounting for just under 3% of total new credit balances for the quarter.
The segment saw a 3% quarter-on-quarter increase in open loans, with total loan balances reaching R208 billion.
The segment took out roughly 180,000 new loans, a 10% quarter-on-quarter increase. More than half of these were unsecured loans.
Overdue balance grew by 6% quarter-on-quarter to R20.7 billion, with the number of defaulters increasing to 300,861, a 0.6% quarter-on-quarter increase.
Loading ...