South Africans are relying on short-term credit

Benay Sager, executive head of DebtBusters, says the struggle has been years in the making. "For the past eight years, income growth hasn’t kept up with the soaring cost of living," he explains.

"Consequently, consumers increasingly rely on short-term credit and personal loans to bridge the gap."

"The numbers are staggering. On average, South Africans spend 66% of their net income on debt repayments—the highest level since 2017. Those earning R35,000 a month use up to 72% of their income to service their loans, while the most vulnerable, earning R5,000 or less, allocate 75% of their earnings to debt. Consumers are being squeezed by high interest rates," Sager warns.

"With unsecured lending rates at 26.7%, nearly at the legal limit of 29%, it’s a dangerous game."

For marketing professional Ntokozo Malinga, 35, tackling debt has become a personal mission.

"This year, I started a financial and physical detox. Staying sober was part of that journey," he says.

"My goal for 2025 is to clear all my bad debts. Last year, I paid off R40,000 in credit card debt, and now I’m down to one last card and a personal loan—both around R49,000 each."

Pheto, too, has a plan. She’s looking beyond cost-cutting and into entrepreneurship. "I’ve already got clientele lined up to start a business that will help reduce my monthly debt. I just need capital."

Both Pheto and Malinga understand that watching interest rates is critical, as many South Africans unknowingly spend years paying off interest instead of actual debt.

"One strategy I try to employ is paying more than the minimum repayment whenever possible," Malinga explains.

"That way, if there’s a bad month, I have a cushion," he says.

Pheto, on the other hand, doesn’t monitor interest rates as closely.

"Most of my debts have fixed interest rates. The only one that fluctuated was an asset I let go earlier this year," she notes.

Can debt be good?

When asked if debt can ever be a good thing, Malinga and Pheto have opposing views.

"I’d consider homes good debt, maybe cars too if they add value," Malinga says.

"But if they’re just liabilities, they’re not worth it," he adds.

Pheto disagrees. "No debt is good debt—it’s a financial setback," she says bluntly.

"But sometimes, we have no choice. Not everyone has savings to pay for things upfront."

Both have learned hard lessons about financial responsibility.

Malinga urges people to avoid debt traps: "Debt can be addictive. Only borrow what you absolutely need. Don’t fall for social media pressure—many financial mistakes are made trying to keep up appearances."

Pheto echoes that sentiment, adding that self-control is key.

"The more debt you have, the harder it is to afford your needs, let alone your wants. Seek financial advice, stay away from short-term loans, and if you already have one, pay it off quickly," she says.

She shakes her head, thinking about how easy it is to spiral into a cycle of borrowing.

"Owing someone money after working an entire month? That feeling is exhausting."

As South Africans continue to struggle under the weight of their financial obligations, Pheto and Malinga’s stories are stark reminders: debt is easy to fall into, but climbing out requires discipline, strategy, and a mindset shift toward long-term financial health.

*Both Pheto and Malinga have chosen to use a pseudonym.

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Surviving Minimum Wage | Understanding our debt crisis: Personal stories from everyday South Africans