SA’s private sector credit extension (PSCE) rose 5.8% year on year in July to R4.98-trillion, with a 0.2% month-on-month uptick, the latest Reserve Bank monthly data shows.
But credit growth is skewed, with corporate lending expanding nearly three times as fast as household borrowing.
PSCE is a core indicator of economic momentum. It measures the total value of credit extended by banks to households and corporates and reflects both the willingness of banks to lend and the confidence of consumers and businesses to borrow.
Total credit to corporations climbed 8.3% year on year, lifting corporates’ share of total credit to 55.31% (from 54.07% a year earlier). Household credit increased 3.0% year on year (0.1% month on month) to R2.23-trillion, leaving households at 44.69% of total credit.
Corporates are borrowing more via general loans, while households are inching forward, with mortgage growth still subdued and credit cards doing most of the heavy lifting.
In the corporate section, the unsecured general loans and advances category (the biggest corporate bucket) increased by 12.7% year on year (up from 9.1% previously).
Investments eased to R344.0bn (down 1.9% year on year) while bills discounted dipped to R7.85bn (down 0.8% year on year).
Why PSCE Matters
Economic barometer
Borrowing trends show economic momentum.
Banking insight
Reveals lending appetite and system health.
Policy signal
Guides rates and inflation outlook.
Business vs households
Splits growth drivers: investment vs consumption.
“Corporates generally remain constrained in a low growth environment, with GDP projected at a modest 0.9% this year,” said Investec economist Lara Hodes.
“Business confidence remains subdued (in contractionary territory, below 50), while the global situation is unpredictable, weighing on investment decisions.”
In the household section, mortgage advances rose to R1.29-trillion in July, up 2.0% year on year but marginally lower month on month, pointing to a still-sluggish property market.
“Despite the more favourable interest rate environment which has seen over 100 basis points worth of cuts since the beginning of the easing cycle, confidence among residential building participants slipped in the second quarter,” Hodes said.
Instalment sale credit — largely tied to vehicle finance — increased to R427.4bn, reflecting solid growth of 7.2% year on year and 0.73% month on month.
Naamsa data shows monthly passenger car sales increased 20.1% compared to July 2024.
Credit card balances climbed 7.0% over the year to R175.3bn, though they slipped slightly from June, highlighting continued reliance on revolving credit.
Nedbank economists expect credit growth to gain momentum in the coming months.
“Lower interest rates and relatively healthy income growth should support stronger household credit demand.”
According to the bank, the upside could be contained by still-fragile consumer confidence due to the weak job market and limited growth prospects.
“Company loan growth will improve further off a low base and as the modest economic recovery starts to pressure existing capacity and investment in renewable energy continues.
“However, the uncertainty surrounding the impact of the US tariffs will prompt some companies to remain hesitant about increasing capital spending.”
Nedbank forecasts growth in loans and advances to end-2025 at about 6%, up from 4.2% in December 2024.
Update: August 29 2025:
This story was updated with Nedbank's comments.
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