Key highlights from the survey
- 5% of respondents are currently using credit.
- 73% of credit users have no savings or emergency buffer.
- 15% of respondents turned to informal lenders (Mashonisas) in the last 12 months, despite only 5% saying they are their preferred method of borrowing money.
- 26% borrow to meet developmental needs like home improvements, business growth, or education.
- 43% borrow for unplanned expenses like medical bills and repairs.
- 27% use credit every month to cover day-to-day living expenses such as groceries, transport, and electricity.
[Cape Town: 17 July 2025] South African short-term lender, Wonga, has released the findings of its latest Credit Utilisation Survey of over 12 000 respondents, finding that nearly 90% of respondents are actively using credit.
The survey shows a financially stretched population navigating a widening gap between earnings, access to savings, and the increasing cost of living, with significantly more than two-thirds of respondents not having any savings.
“Each year we survey a substantial database in winter and summer, and the reality is clear; far too many South Africans earn less than R7 500, and the majority are unable to meet basic needs like seeing the month through without needing additional lifelines,” says Tina Manyanya, Spokesperson at Wonga.
According to the World Economic Forum, access to formal credit is one of the drivers for bridging the economic divide. Developmental credit – credit that facilitates economic and socio-economic growth, such as housing, education and business funding – allows individuals to build better lives, and this is critical to South Africa’s economic aspirations of growing the economy.
“The problem is, however, that in many cases individuals cannot access formal credit, which leads them to turn to informal lenders, such as Mashonisas,” explains Manyanya. “And when they can access credit – either formally or informally – we see a worrying trend of this credit being used simply to survive.”
South Africans are being driven to use informal lenders
When given the choice, almost all (94%) respondents indicated that they would prefer to borrow money from a registered credit provider, friends or family, or through their employer. Only 5% of respondents indicated that they prefer using an informal lenders (such as a Mashonisa) to meet their credit needs.
In reality though, 15% of the respondents have utilised informal lenders in the past 12 months, with most of these earning less than R7 500 per month. This is indicative of higher vulnerability and limited access to formal products.
“Our survey shows that despite many South Africans wanting to utilise formal lending channels, many are being driven to use informal lenders.” says Manyanya.
The survey shows that despite 90% of respondents confirming that they use credit, a staggering 65% had been declined for credit, with decline rates disproportionately concentrated among lower-income groups. More than half of those using informal lending channels earn less than R3 000 per month, while a quarter of those who used informal lending over the past year report that their repayments are their most expensive monthly outgoing.
“It is concerning that many South Africans, especially those in lower income bands, are excluded from formal credit, due to a mismatch between need and regulation. When formal credit options are inaccessible, people turn to informal sources by necessity, not by choice,” says Manyanya.
“Even more worrying is that our survey also showed that 6% of credit users didn’t know the difference between formal and informal lending,” she continues.
Some South Africans are using credit to build better lives for themselves
Around a quarter of respondents (26%) reported that they are taking out credit to meet developmental needs – essentially borrowing to better their lives.
They are taking out loans for building or renovating a home; paying school or university fees; or starting or growing a small business
The survey showed that these developmental credit needs are often being met through general purpose loans or informal lenders due to a lack of accessible, clearly defined developmental credit options in the formal market.
“While we see this as “good credit” as it allows individuals to create a better future for themselves, people are turning to non-developmental, traditional credit products to fulfil these needs as accessibility and other regulatory hurdles are barriers to accessing funds.” explains Manyanya.
However, many are using credit simply to survive
Outranking the need to utilise credit for development needs, or even to address unplanned emergencies, the findings highlight a concerning national reality: many South Africans are using loans to simply stay afloat mid-month and month-end.
Around 27% use credit every month just to cover groceries, transport, and electricity.
“What the data shows is that South Africans are not borrowing frivolously,” says Manyanya. “They are borrowing out of necessity to survive emergencies, educate their children, get to work mid-month, or simply to keep the lights on. This is concerning – using credit for these essential needs is simply using it for survival.”
Where to from here?
Manyanya believes that credit is not just a financial tool, it is a survival mechanism and a stepping stone for many.
The findings from this survey reveal that there is a huge opportunity to bridge the gap between the formal and informal credit markets, leveraging fair credit practices, and more clearly defined regulations, particularly where developmental credit is concerned.
“Formalised credit is critical, and it can be a powerful tool that can drive economic growth when used well. That said, we believe that it requires a regulatory rethink and more accessible, well-communicated credit options,” she explains.
“A better understanding of how formalised credit is critical to South Africa’s economic aspirations of a growing and stabilising economy. At Wonga, we are committed to helping structure an industry that supports this to the benefit of citizens,” she says.
The survey’s findings point to a deeply felt demand for safe, developmental credit solutions and an urgent need for:
- Clearer product visibility and education around developmental credit
- A more inclusive regulatory framework
- Improved access to formal credit for low to middle income earners
“It is the responsibility of lenders and policymakers to make sure credit works for everyone and not just the privileged few – doing our part to help those excluded from the formal credit sector due to the mismatch between need and regulation. This will help bolster much needed economic growth and help an estimated 15 million South Africans that are currently unable to access formal credit,” concludes Manyanya.
For more information on the survey and to access the findings, click through tohttps://insights.wonga.co.za.
