Mar 25, 2025 The TransUnion Industry Insights Report, TransUnion’s Q4 2024 Consumer Pulse Survey
The TransUnion Industry Insights Report
The TransUnion Industry Insights Report highlights the latest trends within the South African credit economy and underlying drivers shaping the future of consumer credit access and health. In the last quarter of 2024, the South African economy demonstrated remarkable resilience; GDP growth increased by 0.6% as it began to recover from a decline in the previous quarter (0.1%). Several key factors drove this significant growth.
The South African Reserve Bank (SARB) implemented an interest rate cut in November 2024 (the second rate cut of the year), resulting in a total reduction of 0.5% for 2024, stimulating economic activity. Consumer inflation ended at 3% for the quarter, well below the SARB’s preferred midpoint target of 4.5%. The labor market saw positive changes, with unemployment rates dropping from 32.1% in Q4 2023 to 31.9% in Q4 2024. Additionally, positive developments in the energy sector contributed to the overall economic improvement. Consumer spending in South Africa accelerated during this period as household consumption rose by 2.3% compared to the same period in 2023.
The positive sentiment was echoed in TransUnion’s Q4 2024 Consumer Pulse Survey which found consumers were more optimistic in Q4 2024. Positive outlooks about future income rose significantly: 79% expected an increase in income (up four percentage points from Q3 2024), especially among Gen Z and Millennials.
The South African credit market experienced a 5.3% year-over-year (YoY) increase in consumers who hold an active and open credit trade in Q4 2024. Among these active consumers, there was also a 1.7% YoY increase in new-to-credit consumers, reaching almost 313,000 new entrants in Q4 2024. Increased supply for credit was further observed with overall new credit originations growing 7.5% YoY to 7.6 million originations across all products.
Unsecured products dominated overall originations (comprising 93% of originations), with non-bank personal loans at the forefront, holding a 63% share across the personal loan market. The easy access to non-bank personal loan products and their dominance of smaller loan amounts have significantly contributed to growth in originations.
Total credit balances increased 3% across all credit products. Consumer credit has shown healthy improvements in serious-level delinquencies (three or more months in arrears), except for secured products and non-bank personal loans.
Positive consumer sentiment and increased credit activity further underscored the potential for sustained economic expansion. As we move through 2025, these encouraging trends set the stage for continued progress, fostering a more robust and resilient economic ecosystem. Lenders will benefit from focusing on sustainable growth strategies — empowering credit education that fosters credit inclusion, enabling younger consumers with their first credit products, building healthy relationships that span the consumer credit journey, and proactively assessing early signs of risk to ensure healthy borrowing and repayment behaviors.
Vehicle finance showed signs of recovery after registering its second consecutive quarter of growth in Q4 2024. The TransUnion Q4 2024 Vehicle Pricing Index report highlights that used vehicle financing outpaced new vehicle financing at a ratio of 1.56:1 as consumers sought more cost-effective options. New vehicle prices increased 1.7% due to supply chain constraints, while used vehicle prices declined 2.8%, making pre-owned vehicles more attractive. New vehicle finance agreements grew 12.7% YoY, with mid-range financing (R250,000–R750,000) accounting for more than 65% of total financed vehicles. The underlying pricing trends of vehicles explains the continued rise in average balances which grew at 5% in the last quarter of 2024.
Alternative ownership models, such as leasing, subscriptions and rent-to-buy agreements gained traction, especially among younger buyers seeking flexible financing solutions. The Q4 2024 TransUnion Consumer Pulse Study also noted that consumers are increasingly considering alternative ownership models, reflecting a shift in consumer preferences towards more flexible and cost-effective options. The growth in used vehicle financing and alternative ownership models presents opportunities to cater to cost-conscious consumers.
As the market recovers, delinquencies are expected to grow and will need to be managed through robust risk management practices and innovative financing solutions. Evaluating consumers’ capacities to borrow against existing obligations is an approach to consider for lenders to better ensure consumers can keep up with their commitments. Financial education is also key to consumers understanding the importance of healthy credit profiles, helping them progress through their lifecycles and take on a vehicle loan, which is an important step in the graduation journey of young and new-to-credit consumers.
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