Debt Rescue reports a concerning surge in consumers depending on credit, including costly short-term loans, to afford essential needs such as food, fuel, electricity and water.
CEO Neil Roets highlights that the crisis has evolved beyond economics into a deeply human issue, with families struggling to survive month to month. Roets cautions that South Africans are entering 2026 facing severe financial strain due to rising living costs, stagnant wages and high interest rates, pushing many households further into debt.
Debt Rescue indicates that households began 2026 burdened by accumulated debt, increased back-to-school expenses and surging living costs that outpace wage growth. While experts like FNB chief economist Annabel Bishop predict potential interest rate cuts later in the year, the current rate freeze is expected to prolong consumers’ debt struggles.
Despite expectations, the South African Reserve Bank’s Monetary Policy Committee has maintained the repo rate at 6.75%, keeping the prime lending rate at 10.50%. This decision has disappointed financially stressed consumers who had hoped for relief from high borrowing costs.
In the third quarter of 2025, South Africa’s total loan balance reached R26 trillion, approximately R43,000 per person. The credit-active population has grown by nearly 4% year-on-year, with overdue balances increasing by 9% to R212 billion. Middle-income earners hold nearly 13 million loans, while lower-middle-income consumers — mostly women with store accounts and credit cards — took out 2.1 million new loans in one quarter, primarily for retail and personal credit.
Roets warns that this situation reflects a nation in deep financial trouble, relying on credit to stay afloat. He believes authorities are not responding urgently enough to these alarming indicators. According to Debt Rescue’s survey, 87% of consumers feel worried, stressed, anxious or overwhelmed by their financial situation.
Many households face impossible choices, such as borrowing to buy food, using credit to keep the lights on, choosing between electricity and groceries and cutting essential items from already limited budgets. Millions of South Africans without access to credit are in even worse situations, forced to make harsh trade-offs to stretch incomes that cannot keep up with rising costs.
The latest Household Affordability Index shows that food and utility prices continue to rise faster than wages, disproportionately affecting low-income families. Roets notes the evident physical and mental health consequences of financial pressure, with many consumers feeling trapped in a cycle they cannot escape.
Although Experian’s Consumer Default Index shows a 14% annual improvement in default rates, this is attributed to stricter lending practices rather than improved consumer finances. With the cost of living still rising and interest rates remaining high, Debt Rescue anticipates more consumers will rely heavily on credit, and some may resort to harmful coping mechanisms such as gambling to cover expenses.
Roets urges the government to prioritise the well-being of ordinary South Africans as economic pressures intensify and advises those overwhelmed by debt to seek assistance from registered debt counsellors, who can help restructure payments and offer a path out of over-indebtedness.
“Consumers are buckling under the weight of financial pressure,” he says. “But help is available and no one should face this crisis alone.”