Q3 2026 Debt Index shows record levels of multi-lender borrowing
Younger, older consumers increasingly face financial stress
Download the full Q3 2026 Debt Index here
South African consumers are turning to non-bank lenders, including retailers, unsecured lenders, microlenders and online lenders, when they can no longer borrow from banks or urgently need short-term cash.
This is one of the findings from DebtBusters’ Q3 2026 Debt Index, marking more than a decade of insights into consumers’ borrowing behaviour. The data is based on information provided by debt counselling applicants.
In Q3 2026, banks accounted for 65% of new applicants’ debt, the lowest share recorded and down from a peak of 75% in Q3 2023. Non-bank lenders almost doubled their share of new applicants’ debt, from 8% in Q3 2024 to 15% in the last quarter, the highest it has been in Debt Index history.
According to Benay Sager, Executive Head of DebtBusters, the shift reflects increased short-term and multi-lender borrowing. In the past quarter, 96% of new debt counselling applicants had a personal loan and a record 64% had a one-month (payday) loan, up from 57% a year ago.
“At 8.8, the average number of credit agreements per applicant is at the highest since the Debt Index began. This indicates the extent of financial pressure consumers are experiencing.”
Although the average net income of incoming applicants has grown by 31%, slightly ahead of CPI at 27%, increased earnings for the highest and lowest income bands skew the numbers. The middle-income bands, the backbone of the country’s working population, have seen almost no change in their take-home pay.
Sager says some cost-of-living expenses have escalated much faster than inflation, citing the 46% increase in fuel prices since 2021 and a 101% rise in electricity tariffs.
“People taking home between R10,000 and R20,000 a month spend 38% of their disposable income just on groceries. For those earning less than R10,000 net, this rises to 50%, leaving little, if anything, for insurance, savings or emergencies.”
While the proportion of take-home pay consumers need to service debt has improved to 65% from a Q1 2021 peak of 73%, it remains concerningly high. Top earners (those taking home more than R50,000) are under the most strain: debt repayments consume 97% of their take-home pay, and their total debt is 300% of their annual net income, the highest of any income group. By contrast, lower-income earners’ debt has shrunk by up to 21%; however, this indicates reduced access to credit rather than improved financial health.
The turn in the interest-rate cycle has added to the pressure. After cuts in late 2024 and into 2025, the repo rate has risen to 7.25%. As a consequence, credit agreement rates are edging up. Unsecured debt now averages nearly 20% per annum; vehicle finance just over 14%, and home loans 10.6%. Home loan debt, as a proportion of total debt, rose from 20% in Q2 to 22% and is expected to continue rising if rates keep climbing.
The findings also indicate that financial stress affects South Africans early and later in their lives. Under-25s now make up 9% of new debt counselling applicants, up 50% from Q3 2025 and triple that of 2024. People who are 45 or older make up 29% of applicants, up from 22% in 2016.
Sager says although the numbers are concerning, the silver lining is that people are seeking help.
“Although there are aspects that could be improved, debt counselling in South Africa clearly works. In Q3 2026, 15 times as many people successfully earned their clearance certificates as in the same period a decade ago. While under debt counselling, they paid their creditors around R613 million; money that flowed back into our economy.”
