Private Sector Credit Extension (PSCE): December 2025

In December 2025, the demand for credit grew by 8.7%, slightly surpassing the market’s expectation of 8.0% for the month. Since interest rate cuts began in September 2024, overall credit growth has accelerated, with most subcategories experiencing increases, especially following the South African Reserve Bank’s decision to lower interest rates.

Despite these reductions, mortgage advances and credit aimed at acquiring fixed assets remain limited. The South African property market is sluggish, reflecting low capital expenditure from both households and businesses. This sector’s recovery is slowed by high consumer debt levels, stagnant wages, and rising living costs. However, the benefits of lower interest rates are anticipated to become evident later in 2026, as household disposable income is boosted by positive market sentiment and the potential for more rate cuts from the South African Reserve Bank (SARB).

In December, instalment credit sales increased again by 0.6% from the previous month, marking an annual growth of 7.9%. Over the past two years, consumers have increasingly relied on short-term credit to manage rising living costs, as shown by an 11.5% increase in other loans and advances, slightly up from 11.3% in November.

With inflation remaining under control, further rate cuts are expected to boost disposable income, thereby supporting increased demand for goods and fixed assets in the first quarter of 2026 and beyond.