A South African can earn a regular income, pay rent, support a household, manage money on a smartphone, and repay previous loans, yet still be difficult for a lender to assess. A conventional credit record may capture only part of that person’s financial life. Limited visibility can easily be mistaken for excessive risk.
This gap has become harder to ignore as the economy has changed. Stats SA counted about 1.9 million people running informal businesses in 2023, while 74.4% of informal businesses had no bank account for the business. Beyond the informal economy, South Africa’s workforce includes people earning through contract work, digital businesses, side ventures, and multiple income sources. Their financial activity is real, even when it does not produce the neat credit footprint associated with formal, salaried employment.
The result is a wider challenge for digital financial services. Credit assessment has to become more responsive to how people actually earn and manage money, while consumers need clearer visibility into their financial position and stronger protection against fraud as more of the relationship moves online.
Going beyond the traditional
Traditional bureau information remains essential because it provides a shared record of borrowing and repayment that lenders cannot responsibly discard. Its limitations arise when a thin credit file is treated as a complete account of someone’s ability and willingness to repay.
