Story audio is generated using AI
While making up almost a quarter of South Africa’s adult population, young people aged 20 to 29 remain on the margins of the country’s credit economy, new data from Experian shows.The credit bureau’s latest consumer default index has found that this age group holds just 10% of active credit accounts and accounts for a mere 4% of the R2.39-trillion in outstanding consumer debt nationally.Experian has described this as the rise of “credit invisibles”, young consumers with little to no footprint in the formal credit system, leaving them with scant opportunity to establish the credit histories needed to access bigger-ticket lending later in life.Where young people do have access to credit, it tends to be concentrated in vehicle finance and retail accounts, Experian said. Home loans, in contrast, make up just 1% of total credit exposure among the youth, underscoring how far removed this group is from asset-building forms of debt.Experian said the youth default rate has eased from 7.21% in March 2025 to 5.79% a year later. But it cautions against reading this as a sign of improving financial health.“Typically, lower default rates signal a healthier consumer base, but in South Africa’s current macroeconomic climate, the reality is far more nuanced.” Experian South Africa chief of credit bureau services Matiisetse Madito said the drop reflects lenders pulling back rather than young consumers managing debt better. He said with youth unemployment above 40%, credit providers have tightened their risk criteria, meaning fewer young applicants are being approved. “While lower default rates among our youth may seem like good news, it’s a hollow victory if they are being omitted from the financial system altogether,” Madito said.For Experian, the answer is not simply opening the credit taps; it is ensuring young South Africans get responsible, sustainable access that allows them to build credit profiles over time.The data also points to a widening split in the broader credit market. Home loans were the standout performer, with defaults falling 16% year-on-year to 1.86%, it said. But unsecured lending told a different story: retail loan defaults climbed 11% to 17.18%, while personal loan defaults rose 4%.Behind these numbers is a consumer base under continued strain from the cost of living. Credit applications bounced back from the seasonal January dip, but approval rates kept falling as lenders held the line on stricter criteria.“This is a climate where credit health education is more critical than ever,” Madito said, adding that teaching young South Africans to manage credit conservatively from the outset of their financial lives “is key to long-term economic resilience”.
