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

Private Sector Credit Extension (PSCE)

March 2025

In March 2025, credit demand rose by 3.5%, a slight decrease from 3.7% in February and below market expectations of 3.9%. While growth was observed across most subcategories, overall credit demand remains relatively low, despite recent interest rate cuts in November and January.

Mortgage advances and credit for fixed asset purchases are especially sensitive to interest rate changes. The 25-basis point reductions implemented in both November 2024 and January 2025 have not yet significantly increased property demand, with these two categories still experiencing constraints. Since September 2024, cumulative interest rates have been reduced by 150 basis points. The benefits of these lower rates are expected to become more pronounced later in 2025 as households and businesses show signs of recovering disposable income, supported by stable market sentiment and growing consumer confidence.

In March, instalment credit sales edged up by 0.7%, following a 0.6% increase in February, with an annual growth rate of 5.9% for March 2025. Over the past two years, consumers have increasingly relied on short-term credit to navigate financial pressures and rising living costs, evident in a 4.4% increase in loans and advances in March 2025, compared to a 4.0% rise in February.

Growth in property and fixed asset purchases remains modest, with mortgage advances increasing by just 3.5% in March 2025, indicating subdued activity. The slowdown in mortgage growth rates observed in late 2023 was influenced by rising interest rates in the property sector. However, the recent 50-basis point rate cut in January, along with earlier reductions, may stimulate demand for properties and fixed assets as household income stabilises and increases in the coming months, especially as positive inflation figures suggest further rate decreases in 2025. As lower interest rates enhance consumers’ disposable income, overall demand for goods and fixed assets is likely to rise as we approach the second quarter of 2025.

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International Trade and Trade Balance – August 2026

South Africa recorded a trade surplus of R20.4 billion in August 2026, as exports continued to outpace imports. Export growth has exceeded import growth over the first eight months of the year, reflecting subdued domestic demand among businesses and consumers. But with higher fuel prices and tighter monetary policy expected to weigh on spending, demand is likely to recover only gradually. Read the full report for a closer look at the trade figures and what they could mean for South Africa’s economy in the months ahead.

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.