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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
May 30, 2025

Private Sector Credit Extension (PSCE)

April 2025

In April 2025, credit demand increased by 4.6%, slightly below March’s 5.8% but above market expectations of 3.25%. Overall, credit growth has gained momentum since interest rate cuts began in September 2024, with most subcategories showing enhancements.

Mortgage advances and credit for fixed asset purchases remain relatively subdued. Despite cumulative interest rate reductions totalling 175 basis points since September 2024—culminating in another 25-basis point cut on 29 May 2025—property demand has not yet responded strongly. The full benefits of lower rates are anticipated to materialise later in 2025, as household disposable incomes improve supported by stable market sentiment.

In April, instalment credit sales rose marginally by 0.3%, following a 0.7% increase in March, with an annual growth rate of 5.8%. Over the past two years, consumers have increasingly relied on short-term credit to manage rising living costs and financial pressures, reflected in a 6.6% jump in other loans and advances after a 4.4% rise in the previous month.

Growth in property and fixed asset purchases remains modest; mortgage advances increased by just 3.5% in April 2025, like March. This subdued activity stems from late-2023 when rising interest rates constrained property demand. However, with recent rate cuts, particularly the 25-basis point reduction in May 2025, along with anticipated further easing, demand for property and fixed assets is expected to pick up as household incomes stabilise and increase.

As inflation remains favourable, ongoing rate reductions should improve disposable incomes further, leading to increased demand for goods and fixed assets heading into the second quarter of 2025.

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Private Sector Credit Extension (PSCE): August 2026

South Africa’s credit market is showing surprising resilience, with credit demand rising by 7.5% in August 2026 despite renewed interest-rate pressure, elevated inflation and mounting household costs. While mortgage advances continued to grow, the fragile recovery in the property market highlights the strain caused by subdued investment, high debt levels and rising municipal and energy expenses. At the same time, sluggish instalment credit growth and continued reliance on short-term borrowing reveal how consumers are navigating increasingly difficult financial conditions. With higher oil prices, geopolitical risks and further SARB tightening adding to the pressure, this report examines what the latest credit trends reveal about household finances, business confidence and the broader South African economy.