Loan defaults down for young South Africans, but access still a hurdle
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GUEST – Jaco van Jaarsveldt, Experian’s Head of Commercial Strategy and Innovation
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. Experian's Consumer Default Index (CDIx) for Q1 2024 reveals a complex picture for young South Africans, highlighting the need for both increased access to responsible credit and enhanced financial literacy.
The Index measures the rolling default behaviour of South African consumers with Home Loan, Vehicle Loan, Personal Loan, Credit Card, and Retail Loan accounts. The CDI for the youngest consumer group – the Yearning Youth - as measured by Experian’s Financial Affluence Segmentation* (FAS), dropped significantly from 21.9 in March 2023 to 16.8 in March 2024. However, this positive trend doesn't necessarily mean their finances have drastically improved. It's rather a case of them finding it harder to access new loans than before the pandemic, as the supply of credit in this category has not returned to pre-pandemic levels.
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. Experian's Consumer Default Index (CDIx) for Q1 2024 reveals a complex picture for young South Africans, highlighting the need for both increased access to responsible credit and enhanced financial literacy.
The Index measures the rolling default behaviour of South African consumers with Home Loan, Vehicle Loan, Personal Loan, Credit Card, and Retail Loan accounts. The CDI for the youngest consumer group – the Yearning Youth - as measured by Experian’s Financial Affluence Segmentation* (FAS), dropped significantly from 21.9 in March 2023 to 16.8 in March 2024. However, this positive trend doesn't necessarily mean their finances have drastically improved. It's rather a case of them finding it harder to access new loans than before the pandemic, as the supply of credit in this category has not returned to pre-pandemic levels.