South African consumers are becoming more selective about using credit, while lenders are growing increasingly cautious about who they lend to. TransUnion's second-quarter 2026 Consumer Credit Industry Insights Report reveals a credit market that remains resilient but is increasingly shaped by affordability pressures and diverging borrower behaviour. The report highlights that demand for credit remains evident across various sectors, including credit cards, personal loans, vehicle finance, home loans, and retail credit.
The credit card market shows a shift towards more selective lending. Active credit card accounts rose 4.6% year on year to 7.7-million in the second quarter, while outstanding balances increased 6.9% to R199.3bn. 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 recorded faster growth, with originations jumping 21.3%, while the number of consumers carrying balances increased 12.7%.
The vehicle finance sector has remained relatively resilient, with outstanding balances increasing 8% year on year to R604.8bn, 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, indicating affordability concerns are influencing buying decisions.
The housing 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. Retail credit presents a mixed picture, with clothing credit remaining relatively strong, while retail instalment credit faced greater pressure. Retail revolving credit moved in the opposite direction, with accounts and balances declining, but delinquency improving significantly.
The data suggests 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 on understanding where growth is occurring, how sustainable it is, and which consumers have the capacity to absorb additional credit responsibly.
Key points
- Home loan originations declined 10.5% year on year, while outstanding mortgage balances increased 4.6%.
- Prime and above-prime consumers accounted for a growing share of mortgage activity.
- Lenders are focusing on sustainable lending and carefully selecting borrowers.
