South Africa’s cost-of-living crisis continues to deepen, with rising reliance on credit driving nearly a third of South Africans to borrow from informal lenders – often just for household essentials – according to Wonga’s annual credit utilisation survey.
Surveying 4 872 respondents across South Africa, findings show a financially stretched population highly dependent on credit to get through the month – with 41% of respondents using credit every month for essentials like groceries, transport, and electricity. Alongside this, around a third of respondents (32%) have borrowed from informal lenders – or Mashonisas – in the last 12 months.
“We wanted to find out how South Africans are spending their money and utilising credit, and the findings are grim – most South Africans are unable to have their basic needs met without relying on credit. This creates a dangerous cycle of debt reliance and over-indebtedness, which fosters an environment where people are not empowered to save or plan,” says Tina Manyanya, spokesperson at Wonga.
Reliance on informal lenders has more than doubled
The number of South African borrowing from informal lenders is more than double the 15% recorded by Wonga in a similar survey in 2025.
Informal borrowing has been mostly concentrated in lower-income bands due to regulatory exclusion from formal credit products: when applying for formal credit, 68% of respondents had been declined at some point, with more than half (54%) attributing it to a low credit score.
Of those that borrowed from a Mashionisa, 85% surveyed stated that this was because their credit score was too low.
“Being denied access to credit does not stop people needing it,” says Manyanya. “Being credit dependent but not being able to access it through regulated channels, instead drives people into the arms of informal lenders. The danger is that they are then trapped in a dangerous cycle of increasing debt.”
No safety net for today, but a nest egg for the future
The credit dependence also becomes alarming when paired with the fact that most respondents (81,5%) do not have immediate access to savings equivalent to one month’s salary – with half of respondents (51%) turning to credit as a shock absorber in the face of unplanned emergencies.
“It is alarming to see that South Africans have to rely on credit when faced with an unexpected medical or repair cost, making a financially bad situation worse and further perpetuating the cycle of indebtedness,” says Manyanya.
Despite this, a positive sign is that 51% of respondents report having some form of retirement, provident, or pension savings for the future.
Credit as an enabler not a survival mechanism
The economic environment in which the survey was conducted is one marred by rising living costs and the results show how South Africans are using credit to get by. However, for Manyanya, credit should be used as a tool for economic growth, rather than a crutch to make it through the month.
“The report highlights the work needed to bridge the gap between the formal and informal credit markets,” she says. “When people utilise informal or unregulated credit services, the cycle of indebtedness only perpetuates itself. This makes it harder for people to empower themselves to save and access the kind of formalised credit services – such as student, car, and home loans – that enable development.
“By building a more inclusive regulatory framework, we can provide a safe, transparent tool to drive much-needed economic growth and help millions of South Africans,” says Manyanya.