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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
September 30, 2026

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.

In August 2026, credit demand grew by 7.5%, slightly above market expectations of 7.1% for the month. Since interest rate cuts began in September 2024, overall credit growth has accelerated, with most subcategories experiencing increases; these increases for August still surprise, as the South African Reserve Bank has already increased the interest rate by 50 basis points since the start of the year. The latest increase came on the back of higher domestic inflation, driven by higher energy costs and higher international oil prices due to the ongoing conflict in the Middle East and risks associated with the closure of the Strait of Hormuz.

Mortgage advances and credit for acquiring fixed assets increased again by 5.1% in August following the 5.2% increase in July. Growth in the South African property market remains fragile and somewhat slow, reflecting low capital expenditure from both households and businesses. This sector’s recovery remains slow due to the increase in the interest rate by the SARB, continued high consumer debt levels, slow wage growth, and high living costs, especially household fuel expenditure due to high international oil prices, as well as high administered prices such as water, electricity, and municipal rates & taxes.

In August, instalment credit sales increased by only 0.5%, following a 0.6% increase the previous month, marking annual growth of 8.7%. Over the past two years, consumers have remained increasingly dependent on short-term credit to manage rising living costs, as shown by a 9.8% increase in other loans and advances, albeit notably down from 13.3% in the February 2026 figures due to the higher interest these loans carry after the interest rate increase the previous month.

With inflation still above the target range and fuel prices remaining elevated, energy costs continue to put upward pressure on prices throughout the entire economy. As a result, the SARB hiked interest rates again at the September 2026 MPC meeting.

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