The Good News is Buried Under a Mountain of Debt

The number is almost too large to comprehend: R2.6 trillion. That’s the total debt load carried by South African households, a sum that breaks down to roughly R43,000 for every single person in the country. It’s a towering figure that speaks to years of economic pressure, reliance on credit to make ends meet, and the high cost of living.

Yet, within the latest Eighty20 Credit Stress Report, compiled with XDS for the third quarter of 2025, there’s a flicker of unexpected light. For the first time in a long while, the relentless climb of defaults is finally easing. It’s not that the mountain is shrinkingit’s still growingbut fewer people are sliding down its steepest slopes.

The Fragile Green Shoot: Fewer Loans in Arrears

The report reveals a nuanced picture. The total amount of overdue debt actually dropped by R3 billion in the quarter, bringing overdue balances to R212 billion. More significantly, the number of loans in arrears fell by almost 90,000. This pulled the share of overdue loans down to 33.1%, the lowest level since early 2023.

This improvement is part of a seven-quarter trend where more loans are being paid on time. The portion of total debt that is past due has dipped to just over 8%. The progress is being driven largely by people catching up on personal loans and vehicle financea sign that some breathing room may be returning to strained budgets.

A Nation Sliced by Debt: Who Owes, and Who Struggles?

The report segments the population, revealing starkly different financial realities:

• The Mass Credit Market (8.6 million people): Primarily employed, lower-middle-income women with store accounts. They took out over 2.1 million new loans last quarter. While over half are still in default, this is a 7% improvement from last year.

• Middle Class Workers (4.1 million people): The backbone with mortgages and families. Their total debt sits at a staggering R541 billion (about R130k per person). Defaults here are also improving, with the share of people in default falling to 41.5%.

• The Most Vulnerable: The “Mass Market” segment remains in the toughest spot, with 51% of people in default.

The Crushing Cost: Debt Eats First

Perhaps the most telling statistic is the debt-to-income ratio. On average, South Africans are now spending 28% of their take-home pay on debt repayments. For every R10 earned, almost R3 goes straight to a lender before anything else is bought.

The burden is heaviest for the high-earning “Heavy Hitters,” who devote nearly half their income to debt. Middle Class Workers commit over a third. This relentless drain explains why, even as defaults ease slightly, the total debt pile continues to swell. Vehicle finance, for instance, has hit a three-year high.

A Stability That’s Skin-Deep

The takeaway is one of fragile, hard-won stability. The marginal improvement in defaults suggests that households are performing a desperate balancing act, perhaps prioritising debt repayment over other spending. It is a slight easing of a crisis, not its end. The underlying pressureR2.6 trillion worthremains, a monument to the profound financial strain underpinning the South African economy. The mountain hasn’t moved; we’ve just found a slightly less slippery patch on which to stand.