The number of people who rely on loan sharks has more than doubled from 15% in the 2025 survey.
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As South Africa’s cost-of-living crisis deepens, rising reliance on credit is driving some people to borrow from informal lenders, commonly known as mashonisas or loan sharks, to get through the month. This was revealed in short-term lender Wonga’s annual credit utilisation survey.
Tina Manyanya, spokesperson at Wonga said the findings show a financially stretched population highly dependent on credit to get through the month, with 41% of respondents using credit every month for essentials like groceries, transport, and electricity.
In the same breath, 32% of respondents have borrowed from informal lenders – or mashonisas – in the last 12 months.
Reliance on mashonisas grows
“We wanted to find out how South Africans are spending their money and utilising credit, and the findings are grim; most South Africans are unable to have their basic needs met without relying on credit,” said Manyanya.
“This creates a dangerous cycle of debt reliance and over-indebtedness, which fosters an environment where people are not empowered to save or plan.” The findings are drawn from 4 872 respondents.
The proportion of people who rely on mashonisas has more than doubled from 15% in the 2025 survey.
Lack of access to formal credit leads to mashonisas
The survey found that borrowing from mashonisas is mostly concentrated in lower-income bands because of limited access to formal credit products. When applying for formal credit, 68% of respondents were declined at some point, with more than half (54%) attributing it to a low credit score.
Of those who borrowed from a mashonisa, 85% surveyed said it was because their credit score was too low.
“Being denied access to credit does not stop people needing it. Being credit dependent but not being able to access it through regulated channels instead drives people into the arms of informal lenders,” Manyanya. “The danger is that they are then trapped in a dangerous cycle of increasing debt.”
Credit dependence
The report also revealed that more people are becoming dependent on credit. 81.%% of respondents said they do not have immediate access to savings equivalent to one month’s salary, with 51% turning to credit as a shock absorber in the face of unplanned emergencies.
“It is alarming to see that South Africans have to rely on credit when faced with an unexpected medical or repair cost, making a financially bad situation worse and further perpetuating the cycle of indebtedness,” said Manyanya.
Despite this, a positive sign is that 51% of respondents reported having some form of retirement, provident or pension savings for the future.
No money left after paying for essentials
René Moonsamy, National Debt Counselling Association (NDCA) chairperson, said many people end up overspending and going into debt because they struggle to make it through the month, with the real reason being that after paying for essentials and servicing debt, there is simply no money left.
People are increasingly depending on two-pot retirement withdrawals to cover basic expenses such as food, electricity, rent, school fees or to help family members.
At the same time, household debt is increasing. According to the South African Reserve Bank, it rose to 62.2% of disposable income in Q1 2026, up from 61.8% in the previous quarter.
Income growth as an issue
A recent DebtBusters survey of 18 000 consumers found that 53% of respondents spent more than 40% of their take-home pay on debt repayments, up from 48% last year.
“This all points to the real problem being income growth that hasn’t kept pace with expense growth, rather than a lifestyle overspending issue. People can’t make ends meet and so are dipping into retirement savings or borrowing to make up the shortfall,” said Moonsamy.
She noted that using retirement savings can provide relief in a genuine financial emergency. When this money is used to cover daily living expenses, there is an underlying cash-flow problem.
Dependence on credit for groceries
Moonsamy said the rate of households depending on credit for groceries, municipal rates, electricity, school fees, and daily expenses has been increasing.
Often, using credit to cover a temporary shortfall can start a cycle of borrowing that eventually results in a situation where 40% or more of take-home pay is needed to repay debt. Most debt counsellors consider this unsustainable, according to Moonsamy.
“Credit should not become part of your monthly income,” says Moonsamy. “If you’re repeatedly borrowing to make it through the month, your financial commitments are not affordable.”
