Though consumer sentiment continues to improve in 2025, South Africans are still under severe financial strain.
This is according to DebtBusters’ Q3 2025 debt index report, a quarterly evaluation of debt counselling applications, released on Tuesday.
DebtBusters head Benay Sager said successive interest rate and petrol price reductions have helped consumers better deal with debt, but finances are still highly strained.
“Over the past nine years, income growth has not kept up with significant cost increases, and consumers are using short-term unsecured credit and personal loans to make up the shortfall,” he said.
“Of those who apply for debt counselling, 95% have a personal loan and 57% have a payday loan. A further 22% use overdraft facilities regularly. Vehicle debt also seems to be increasing and is now making up a substantial portion of the incoming client cohort debt.”
The most vulnerable consumers, who earn R5,000 or less a month, use 92% of their income for debt repayments. These ratios are at their highest-ever levels.
Demand for online debt management grew by 47% compared with the same period last year.
Other findings from the Q3 2025 report are, compared to 2016:
- 48% less purchasing power;
- electricity costs 165% more than nine years ago, and the petrol price is 80% higher, both contributing to cumulative inflation of 51%; while
- nominal net incomes have only increased by 3% over the same period.
The report shows a high debt-service burden. “Before coming to debt counselling, consumers were spending 70% of their net income to repay debt. This is the highest since 2017,” said Sager.
“People taking home R35,000 a month use 78% of their income to repay debt, and their total debt-to-net-income ratio is 189%.
“The most vulnerable consumers, who earn R5,000 or less a month, use 92% of their income for debt repayments. These ratios are at their highest-ever levels.”
It also found high levels of debt among top earners.
“Average unsecured debt levels were 32% higher than nine years ago but are lower than the same period last year.
“For people taking home R35,000 or more, unsecured debt levels were 61% higher. While this is only slightly higher than the cumulative CPI growth since 2016, without meaningful salary increases, these consumers need to supplement their income with unsecured credit.
“Since 2016 the number of people who have successfully completed debt counselling has increased 12-fold. In Q3 2025 consumers who received their clearance certificates paid back more than R540m worth of debt.”
TimesLIVE
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