Debt counselling improves South African credit profiles
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Sanlam Credit Solutions tracked 800,000 of its 1.2 million users in South Africa over two years and found debt counselling is helping people improve their financial standing.
The National Credit Regulator reports that 10.54 million of South Africa’s 29.24 million credit-active consumers are over-indebted and in arrears, while annual consumer price inflation rose to 4.0%. However, Sanlam’s data shows positive changes among its user base.
Afua Darko, business head at Sanlam Credit Solutions, explained that the company observed a decrease of over 30% in high-risk borrowers. Millennials using the service saw a 38% drop in debt-to-income ratios above 50%, and Gen Z’s high-risk classification fell by 37%. Sanlam classifies users based on credit scores, noting that a high-risk profile limits access to credit and increases borrowing costs.
Among Sanlam Credit Solutions users who started debt counselling before January 2025, 18.5% moved to a very low-risk classification, while 32.73% moved away from being high-risk. Darko stated that 56% of debt-stressed millennials have adopted debt counselling, which eases financial strain and allows them to save and invest. She also noted a 41.2% increase in home loan uptake among Gen Z users, indicating a move toward asset-backed borrowing.
