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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
October 29, 2026
Credit demand in South Africa continued to grow in September 2026, but fell short of market expectations as households and businesses faced higher interest rates, rising living costs and persistently high debt levels. While mortgage advances and fixed-asset credit picked up, the property market’s recovery remains fragile, and consumers continue to rely on short-term borrowing to manage expenses. With inflation above the target range and energy and fuel costs adding to price pressures, the latest interest rate hike raises fresh questions about the outlook for credit and the wider economy. Read the full report for a closer look at the trends shaping borrowing across the country.

Private Sector Credit Extension (PSCE): September 2026

Line chart of year-on-year growth in South African private sector credit extension from January 2015 to September 2026, by credit category
Category % of Total Credit MoM% YoY%
Aug-26 Sept-26 Aug-26 Sept-26
Instalment sale credit 12.4%0.5%0.8%8.7%9.1%
Mortgage advances 39.4%0.4%0.6%5.1%5.5%
Other loans and advances 40.3%2.4%0.1%9.8%7.6%
Total credit extended to the private sector 100.0%1.5%0.2%7.5%6.2%

In September 2026, credit demand grew by 6.2%, well below market expectations of 7.5%. Since interest rate cuts began in September 2024, overall credit growth has accelerated, with most categories recording increases. September’s growth is notable, given that the South African Reserve Bank (SARB) has raised interest rates by 50 basis points since the start of the year. The latest increase followed a rise in domestic inflation, driven by higher energy costs and international oil prices amid 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 grew by 5.5% in September, following a 5.1% increase in August. Recovery in the South African property market remains fragile and slow, reflecting low capital expenditure by households and businesses alike. The sector continues to face several headwinds, including the SARB’s interest rate increases, high consumer debt, slow wage growth and elevated living costs. These include household fuel costs, which have risen alongside international oil prices, as well as administered costs such as water, electricity, and municipal rates and taxes.

Instalment credit sales grew by just 0.8% in September, following a 0.5% increase the previous month, bringing annual growth to 9.1%. Over the past two years, consumers have become increasingly reliant on short-term credit to manage rising living costs. This is reflected in a further 7.6% increase in other loans and advances, although growth slowed from 9.8% the previous month amid higher interest rates following the latest increase.

With inflation still above the target range and fuel prices remaining elevated, energy costs continue to put upward pressure on prices across the economy. In response, the SARB raised interest rates again at its September 2026 Monetary Policy Committee (MPC) meeting.

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Credit demand in South Africa continued to grow in September 2026, but fell short of market expectations as households and businesses faced higher interest rates, rising living costs and persistently high debt levels. While mortgage advances and fixed-asset credit picked up, the property market’s recovery remains fragile, and consumers continue to rely on short-term borrowing to manage expenses. With inflation above the target range and energy and fuel costs adding to price pressures, the latest interest rate hike raises fresh questions about the outlook for credit and the wider economy. Read the full report for a closer look at the trends shaping borrowing across the country.
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