The South African credit market remains resilient, but is increasingly shaped by affordability pressures and diverging borrower behavior, according to TransUnion's second-quarter 2026 Consumer Credit Industry Insights Report. Consumers are becoming more selective about how they use credit, while lenders are growing cautious about who they lend to. Demand for credit remains evident across various sectors, including credit cards, personal loans, vehicle finance, home loans, and retail credit.
The credit card market highlights this shift, with active credit card accounts rising 4.6% year on year to 7.7 million in the second quarter, while outstanding balances increased 6.9% to R199.3 billion. However, new account originations fell 16.8% to 221,500, and the average credit line on newly opened accounts increased 8.2% to R24,600. This suggests lenders are willing to extend meaningful credit, but only to carefully selected borrowers.
A similar divergence is evident in the personal loan market, where banks and non-bank lenders are following different paths. Bank personal loan originations increased 7.7% year on year, while outstanding balances rose 8.9%. Average new loan values climbed 9.2%, and balance-level delinquency improved substantially. Non-bank lenders, by contrast, recorded faster growth, with originations jumping 21.3%, while the number of consumers carrying balances increased 12.7%.
The home loan market reveals a different trend, with home loan originations declining 10.5% year on year, while the number of mortgage accounts fell 4.6% and consumers carrying balances dropped 7.5%. Despite this, outstanding mortgage balances increased 4.6% and average balances rose 9.6%. The figures indicate a market increasingly concentrated among higher-income borrowers able to afford larger property purchases.
TransUnion noted that prime and above-prime consumers accounted for a growing share of mortgage activity, while participation among lower-risk tiers moderated. This shift suggests that lenders are becoming more cautious about lending to lower-income borrowers, and are instead focusing on higher-income borrowers who are more likely to be able to afford larger property purchases.
The vehicle finance market has remained relatively resilient, with outstanding balances increasing 8% year on year to R604.8 billion, supported by a 5.5% rise in average new loan values. However, origination growth was modest at 1.1%. Consumers are increasingly weighing financing costs, fuel efficiency, and overall ownership costs when purchasing vehicles, suggesting that affordability concerns are influencing buying decisions.
The data suggests that households are becoming more deliberate about the type of credit they use, while lenders are focusing less on growth in volumes and more on sustainable lending. As the market becomes more segmented, competitive advantage is likely to depend less on expanding exposure and more on understanding where growth is occurring, how sustainable it is, and which consumers have the capacity to absorb additional credit responsibly.
Key points
- The South African home loan market is shifting towards higher-income borrowers.
- Lenders are growing increasingly cautious about who they lend to.
- Consumers are becoming more deliberate about how they use credit.
