More South Africans turn to personal loans as income is eroded by rising expenses
Rising expenses push South Africans towards personal loans
Image: Karen Sandison
Consumers are increasingly feeling the pinch with a record number of people who are now in debt review having a personal loan.
The latest DebtBusters' Debt Index for the first quarter of the year showed that more South Africans than ever are using personal loans to make up the shortfall between income and the rising cost of living. This, it said, is despite South Africans having access to some of their retirement savings in the form of the 'two-pot' retirement regime.
However, Benay Sager, executive head of DebtBusters said that debt counselling enquiries were 'a bit muted' compared to previous years. He attributed this to uncertainty about the macroeconomic environment as well as access to retirement funds.
The number of consumers who completed debt counselling has increased 11-fold since 2016. Consumers who received their clearance certificates in the first quarter of 2025 paid back over R700 million to their creditors.
This comes as Statistics South Africa released its unemployment figures, also on Tuesday, which showed that the unemployment rate has increased to 32.9% from the last three months of 2024, when it was 31.9%. The overall unemployment rate, which includes discouraged job seekers, went from 41.9% to 43.1%.
DebtBusters' research also found that 37% of people applying for debt review had a one-month loan - also known as a payday loan.
These increases in debt come as consumers are less optimistic about South Africa's economic environment, with the FNB/BER Consumer Confidence Index dropping to its lowest point since the second quarter of 2023 as of the first three months of the year.
Sager pointed out that 'personal loans, especially one-month loans, remain a lifeline for many, because income has not kept pace with rising expenses'.
Over the past nine years, electricity tariffs have increased by 135%, the price of petrol has risen by 88%, and the compound effect of inflation is 52%, DebtBusters pointed out.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Next
Stay
Close ✕
As a result, those who applied to the company for debt counselling in the first quarter of this year were using an average of just more than two-thirds of their net salary to pay debt, the debt review company said in a statement. 'This is a significant increase compared to previous quarters and the highest since 2017,' it added.
'The most vulnerable consumers, taking home R5 000 or less per month, use 76% of their income to repay debt. Those earning R35,000 or more spend 77% servicing debt. The ratios for these income groups are the highest since DebtBusters started analysing the data in 2016,' it noted.
DebtBusters added that today's consumers have 53% less purchasing power than in 2016. However, for those taking home R35,000 or more, nominal income has increased by 11% since 2016 – the first significant growth for some time.
Consumers in most income bands spend 25% of their disposable income, after debt repayments, to pay for water, electricity, rates and transport. Food inflation has meant many have had to sacrifice insurance and assurance cover, said DebtBusters.
IOL
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


The South African
an hour ago
- The South African
Netflix hikes package prices: How much you will now pay
Netflix subscribers are facing higher monthly bills as the global streaming giant implements price increases from June. Image: Netflix South African Netflix subscribers are facing higher monthly bills as the global streaming giant implements price increases across three of its four subscription tiers. The changes, which began rolling out in May 2025, are now in full effect for most users. The new pricing structure sees increases to the Mobile, Standard, and Premium plans, while the Basic plan remains unchanged. This marks Netflix's second price hike in South Africa since its 2016 launch. When South Africans connect, we don't just network; we build a community. The Lekker Network is a professional network where every conversation starts with, 'How can I help you?' Come join us & be a part of a community of extraordinary Saffas. New Netflix South Africa pricing: Mobile : R59/month (up from R49) – +20% : R59/month (up from R49) – Standard : R179/month (up from R159) – +13% : R179/month (up from R159) – Premium : R229/month (up from R199) – +15% : R229/month (up from R199) – Basic: Remains at R99/month Subscribers were notified via email and in-app messages depending on their billing cycles, with the updated prices applying from their next payment date in June. While Netflix has not released an official media statement regarding the change, a note on its website reads: 'Plans and pricing may change as we continue to improve our service and add more TV shows and movies. Adjustments can also happen in response to local market changes, such as changes to local taxes or inflation.' The price hikes come at a time when South African consumers are increasingly sensitive to cost-of-living pressures, with many streaming platforms competing for attention in a saturated market. MultiChoice also upped prices Earlier this year, MultiChoice implemented its own price and product adjustments for DStv and Showmax, signaling a broader industry trend of rising subscription costs as content providers invest more in technology, content rights, and user experience. The unchanged Basic plan offers some relief to budget-conscious subscribers, while the Mobile plan -aimed at single-device viewers – is still Netflix's most affordable option, albeit now 20% more expensive than before. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.


The Citizen
an hour ago
- The Citizen
BEE is bringing South Africa's economy to its knees
BEE is bringing South Africa's economy to its knees – new report A report released on June 12 by the Solidarity Research Institute (SRI) and the Free Market Foundation (FMF) has sent shockwaves through South Africa's political and economic landscape. The report delivers a scathing critique of the country's Broad-Based Black Economic Empowerment (BEE) policy, asserting that it is causing substantial damage to the South African economy while enriching only a small, politically connected elite. BEE was initially introduced as a transformative policy aimed at redressing the economic imbalances of apartheid by promoting greater inclusion of black South Africans in the economy. However, the latest findings paint a different picture, highlighting a policy that is now burdening economic growth, exacerbating inequality, and stalling job creation. According to the report, the annual compliance costs for BEE range from R145-billion to R290-billion, which represents between 2% and 4% of South Africa's Gross Domestic Product (GDP). This enormous economic burden has resulted in an annual reduction of GDP growth by between 1.5% and 3%, with a concomitant loss of between 96 000 and 192 000 jobs each year. Over the years, this has accumulated to about 3.8 million lost job opportunities for South Africans. 'This huge economic cost is not simply the result of negligence or the mere poor implementation of a plan. It is a deliberate government policy that causes it,' said Theuns du Buisson, economic researcher at the SRI and co-author of the report. 'It is irrelevant when someone then says the policy was introduced with good intentions. Today it serves as a mechanism to enrich the elite at the expense of our country's economy and especially at the expense of its poorest citizens.' The report further outlines that while there has been some progress in terms of black ownership and skills development, these gains are heavily overshadowed by the adverse effects of BEE. Among these are increased inequality, elite capture of policy benefits, and widespread economic stagnation. 'The policy places a particularly heavy burden on critical sectors such as mining and finance,' the report reads, 'and it deters foreign investment, encourages capital flight, and stifles technological progress.' South Africa's economic position on the global stage has deteriorated markedly, falling behind other middle-income countries with which it was once comparable. The report critiques the lack of focus and effectiveness in the implementation of BEE policies, which contrasts with more successful affirmative action or empowerment programmes abroad. Du Buisson pointed to countries such as Brazil and the United States, which have begun to phase out similar race-based economic policies. 'Moreover, in other countries, affirmative action policies are precisely there to prevent discrimination, while in South Africa, they in fact make discrimination compulsory,' he noted. 'South Africa must now follow the path of other countries and get rid of it. BEE has become an instrument that benefits a small, politically connected elite and has long ago stopped being a policy that could empower a disadvantaged society.' Connie Mulder, head of the SRI, emphasised the urgency of the situation: 'South Africa cannot afford to continue down this path. The data is clear. BEE, in its current form, is damaging the economy and hurting those it was meant to help. We need policies that promote real economic participation and growth without racial quotas that cripple progress.' The call to action from the writers of the report is for policymakers to immediately abolish the current BEE framework and replace it with a policy that fosters inclusive growth without impeding the economy. 'We need an economic environment where all South Africans, regardless of race, have the opportunity to contribute and prosper,' Du Buisson said. – Access the full report here: Do you have more information about the story? Please send us an email to bennittb@ or phone us on 083 625 4114. For free breaking and community news, visit Rekord's websites: Rekord East For more news and interesting articles, like Rekord on Facebook, follow us on Twitter or Instagram or TikTok. At Caxton, we employ humans to generate daily fresh news, not AI intervention. Happy reading! Stay in the know. Download the Caxton Local News Network App Stay in the know. Download the Caxton Local News Network App here


The South African
3 hours ago
- The South African
Spar boss Max Oliva quits to take over as McDonald's CEO
Veteran retail executive Max Oliva is stepping down as CEO of Spar South Africa after a 30-year tenure with the group to take on a new leadership role as the CEO of McDonald's South Africa. His appointment at the fast-food giant will take effect from 1 July 2025. When South Africans connect, we don't just network; we build a community. The Lekker Network is a professional network where every conversation starts with, 'How can I help you?' Come join us & be a part of a community of extraordinary Saffas. Oliva, widely respected within the industry for his strategic leadership and operational expertise, leaves behind a significant legacy at Spar. During his time with the retailer, he played a pivotal role in guiding the company through some of its most challenging chapters, including the Covid-19 pandemic, the rollout of the SAP enterprise resource planning system, and the broader digital transformation of the business. Spar Group CEO Angelo Swartz will assume Oliva's responsibilities, taking on operational leadership of the group's Southern Africa region. Swartz praised Oliva's impact and leadership, stating: 'I have had the privilege of working closely with Max for many years and have immense respect for his leadership and the legacy he leaves. Thanks to the strong foundation he has laid, I approach this next phase with confidence that, together with our talented team, we will continue to push forward and deliver on our growth ambitions for Southern Africa.' Spar described Oliva's exit as the end of an era, noting his enduring contribution to the company and the retail sector as a whole. Meanwhile, McDonald's South Africa has welcomed Oliva's appointment, citing his deep operational background and inclusive, values-driven leadership style as key factors behind the decision. The company expressed confidence that he will accelerate innovation, improve the customer experience, and strengthen McDonald's market position. 'Throughout his career, Oliva has been recognised for his inclusive, values-driven approach, and his ability to unite diverse teams around shared goals,' McDonald's SA said in a statement. 'These attributes, combined with his strong operational background, made him the clear choice to lead McDonald's SA forward.' Oliva's move marks a major leadership shift in two of South Africa's most prominent consumer-facing brands, as both Spar and McDonald's look to sharpen their competitive edge in a fast-evolving retail and food service landscape. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.