Young Saffers still battle to access finance, despite fewer defaults

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As South Africa commemorates Youth Day, the spotlight falls on the financial health of young consumers and their ability to leverage credit as a tool for empowerment.

The CDI for the youngest consumer group – the Yearning Youth – as measured by Experian’s Financial Affluence Segmentation , dropped significantly from 21.9 in March 2023 to 16.8 in March 2024. “We have, however, seen a slowdown in credit extension to these young and credit inexperienced consumers so that while fewer defaults are good, limited access to credit can hinder their financial progress. This highlights the need for increased financial literacy and responsible credit options for young South Africans,”

At a product level, Home Loans saw the largest deterioration in CDI, with a 21% deterioration Y-o-Y up from 2.22 to 2.68. Although still significant, the rate of deterioration is slowing down, considering that in Q4 2023, we saw an annual deterioration rate of 60%. With Home Loans accounting for the majority share of the total market exposure, the deterioration in Home Loans was the main driver of the deterioration seen in the composite CDI.

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