South African households have now improved their financial position for nine consecutive quarters. That sounds like good news, and in part it is. But look beneath the headline number and the recovery is thinner than it appears, and more exposed to the decisions being made right now about interest rates.
The Altron FinTech Household Resilience Index (AFHRI), compiled for us by economist Roelof Botha, tracks 20 indicators tied to household income and asset values, all adjusted for inflation. In the second quarter of 2026 it reached 116.1, meaning households are 16.1% better placed in real terms than in early 2014. Over the past year the index grew by 1.5%. Over the past quarter it grew by 0.1%.
That slowdown is the story.
What has worked
The improvement since late 2024 has a clear cause. When the Reserve Bank began cutting rates in September 2024, pressure on household budgets eased quickly. The ratio of household income to debt costs, which took a beating during the high-rate years of 2023 and 2024, is up 4.8% year on year. Bank credit impairments have improved, and consumption spending and disposable income are both up in real terms. Since the cuts began, the AFHRI has grown at an average of 2.4% a year, double the rate of growth in gross domestic product (GDP) over the same period.
Households have also been rebuilding savings. Unit trust assets are up 8.9% in a year and more than 50% higher than before the pandemic.
What hasn’t
The weak point is the one that matters most: income from work. Private-sector salaries fell 1.8% in real terms over the year. Private-sector employment grew by just 0.5%, and public-sector employment fell by 3.5%. Civil debt defaults have worsened markedly.
Savings and lower interest bills can carry households for a while. Jobs and wages are what sustain them. Without growth in both, the gains of the past two years are vulnerable.
Why the timing matters
Since May, the Reserve Bank has raised rates twice, taking prime from 10.25% to 10.75%. The trigger is inflation driven largely by fuel prices and global shipping costs, both linked to conflict far from our borders. Higher local rates do little to bring down the oil price. They do raise the cost of every home loan, vehicle loan and credit card balance in the country.
The Reserve Bank’s mandate is price stability, and its credibility has served South Africa well. But a supply shock landing on households that have only just regained their footing calls for care. Our data show how quickly the high-rate years eroded household resilience, and how quickly it recovered once rates came down.
What it means for our industry
For lenders and the fintech companies that serve them, this is a moment for discipline rather than retreat. Affordability assessments need to reflect that real wages are under pressure, even where balance sheets look healthier. Payment and collections systems need to work with customers who are stretched, not against them. And the industry should use the data now available to extend credit responsibly to households that can carry it, because access to fairly priced credit is part of how resilience is built.
There are reasons for optimism. Energy reform is opening up the electricity market, Moody’s has moved South Africa’s outlook to positive, and an easing in global oil prices would feed through quickly to household budgets. The foundations for a stronger recovery are in place.
But balance sheets can only carry households so far. Until employment and wages start growing again, household resilience will remain something we measure carefully rather than something we can take for granted.
The full AFHRI report for the second quarter of 2026 is available at www.altronfintech.com.
- The author, Johan Gellatly, is MD of Altron FinTech
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