Consumer Pulse Q3 2021

Financial impact and concern regarding ability to pay loans remain high 

During the middle of Aug., a month after South Africa was gripped by civil unrest, looting and the third wave of the COVID-19 pandemic, 61% of respondents indicated their household income was currently negatively impacted as a result of the crisis. Consumers remain concerned about their ability to pay their bills and loans. Forty-one percent reported they’ve been in arrears for a bill or loan in the past three months, indicating a substantial proportion of South Africans remain under financial pressure. Of consumers who missed payments in the last three months, 33% reported missing one and two bills or loans, and 17% missed three bills or loans. Furthermore, 79% of consumers are very or extremely concerned about the current inflation rate, and 83% are making changes to their purchasing behaviour because  of inflation.

Opportunities for credit growth

However, consumers do express the need, as well as appetite for credit: 81% of households consider access to credit important or moderately important, but only 33% believe they currently have sufficient access to credit and lending products. Almost a third (31%) plan to apply for new credit or refinance existing credit within the next year — with new personal loan (43%) and new credit card (35%) applications topping the list. 

South Africans less optimistic about the future 

Only 3% indicated their household finances have fully recovered since being impacted by the pandemic. Exactly half (50%) said they’ve not recovered. Previous higher levels of optimism have decreased, likely as a result of the unrest and riots which took place in July. A lower 69% of South Africans remain optimistic (down six percentage points from June and seven from March). The proportion of consumers who are confident their household finances will fully recover in the next 12 months dropped from 52% in June to 47% in Aug.