{"id":778728,"date":"2024-06-25T11:30:00","date_gmt":"2024-06-25T09:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=778728"},"modified":"2024-06-25T16:32:31","modified_gmt":"2024-06-25T14:32:31","slug":"retailers-closing-the-taps-on-young-south-africans","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/778728\/retailers-closing-the-taps-on-young-south-africans\/","title":{"rendered":"Retailers closing the taps on young South Africans"},"content":{"rendered":"\n

Young South Africans have faced increased challenges in accessing retail credit since the Covid pandemic. <\/p>\n\n\n\n

Although down as a result of this, defaults still remain high in this demographic, highlighting the need for greater financial literacy and responsible credit options.<\/p>\n\n\n\n

This is according to Experian’s Consumer Default Index (CDIx) for Q1 2024, which revealed “a complex picture for young South Africans, highlighting the need for both increased access to responsible credit and enhanced financial literacy.” <\/p>\n\n\n\n

The index tracks default rates among South African consumers for various loans including home, vehicle, personal, credit card, and retail accounts.<\/p>\n\n\n\n

The Q1 2024 index showed that young people account for 16.4% of credit-active South Africans, with a bias (over 80%) towards retail credit.<\/p>\n\n\n\n

Of this, the default index of young people dropped significantly from 21.9 in March 2023 to 16.8 in March 2024 \u2013 still remaining the highest among CDI groups.<\/p>\n\n\n\n

“However, this positive trend doesn’t necessarily mean their finances have drastically improved [but] rather a case of them finding it harder to access new loans than before the pandemic,” said Experian.<\/p>\n\n\n\n

Experian said that this is because the supply of credit for this category has not returned to pre-pandemic levels.<\/p>\n\n\n

\n
\"\"<\/a>
Source: Experian<\/figcaption><\/figure><\/div>\n\n\n

“We have… seen a slowdown in credit extension to these young and credit inexperienced consumers so that while fewer defaults are good, limited access to credit can hinder their financial progress,” said Jaco van Jaarsveldt, Experian\u2019s Head of Commercial Strategy and Innovation.<\/p>\n\n\n\n

“This highlights the need for increased financial literacy and responsible credit options for young South Africans,\u201d he added.<\/p>\n\n\n\n

\n
4 financial mistakes young South Africans make – and how to avoid them<\/a><\/blockquote>