The Eighty20 Credit Stress Report reveals a troubling trend 40% of all credit defaulters in the country are under the age of 35, despite this group holding only 17% of the country’s total credit.
The findings highlight a growing reliance on unsecured lending, such as clothing accounts and personal loans, which are easily accessible but carry high risk. These credit options often become the entry point into borrowing for many young South Africans, leading to unsustainable debt levels early in life.
Debt counsellor Samantha Moyana from the National Debt Advisors spoke about the underlying issues driving the crisis.
“Young people are facing mounting financial pressure, often without the tools or knowledge to navigate it,” she said. “From student loans to credit cards, many fall into debt because they aren’t properly informed about managing money.”
Moyana explained that unsecured loans are particularly appealing to young people because they’re the most readily available. “It’s far easier to open a store account or take out a personal loan than to qualify for secured credit. But this also makes them more vulnerable to falling behind on payments, especially when spending is driven by social pressures and lifestyle expectations.”
She believes financial education is key to reversing the trend. “Financial literacy needs to start early, ideally in primary school,” Moyana said. “Children don’t need to learn complex terms; even simple ideas like saving part of their pocket money can lay a strong foundation.”
Parents, she added, also have a role to play. “If your child gets $0.54 in pocket money, teach them to save $0.11 or $0.16. Let them understand that money isn’t just for spending, it’s also for planning and preparing for the future.”
For young people already in financial trouble, support is available. Debt counselling and financial advice services can help with budgeting, repayment planning, and financial goal setting. “Many think they can manage on their own, but professionals can offer valuable insight and support,” Moyana said.
She also addressed the emotional toll of debt. “Financial stress can affect mental health. For some, payday brings anxiety rather than relief. That’s why seeking help early is critical.”
--ChannelAfrica--
