Q2 2026 | April - June | With Historical Trends 2020-2026
Sibabalwe Samora Dakana
Managing Director & Principal Debt Counsellor
Published: 1 July 2026
Key findings from NDRC's debt review portfolio (March 2020 - June 2026)
The average debt-service ratio for consumers entering debt review rose to 44.4% in Q2 2026, up from 39.3% in Q1 , a 5.1 percentage-point deterioration in a single quarter. The reversal of Q1's gains follows the record April fuel hike, an 8.76% Eskom tariff increase from 1 April, and SARB's decision on 28 May to raise the repo rate to 7.0% (its first hike since 2023).
Unsecured credit now accounts for 61.4% of the portfolio, a 2.4 percentage-point widening from Q1's 59:41 split. "Other Credit" (payday lenders, short-term facilities and micro-loans) held its lead at 35.1%, while credit card exposure rose 2.2 percentage points as households turned to revolving credit to absorb the cost-of-living shock.
In June 2026 the NCR issued Circular 004/2026, reaffirming a consumer's absolute right under section 86(1) of the NCA to transfer debt counsellors at any stage without approval from the existing DC. The Circular sets a 7-business-day ceiling on transfer processing, prohibits re-charging of application, administration, restructuring or legal fees already paid, and confirms that a PDA statement is not proof of work done. NDRC's transfer-in workflow was already aligned with these requirements.
Interest-rate reductions at restructuring averaged 11.9 percentage points on unsecured credit and 3.6pp on vehicle finance. Completion rate softened to 29.5% as suspension share expanded to 33%.
Macro pressure intensified through the quarter. Headline CPI climbed from 3.1% (March) to 4.0% (April) to 4.5% (May), the highest print since July 2024, and Stats SA's Q1 QLFS (released 12 May) recorded unemployment at 32.7% , up 1.3pp quarter-on-quarter. GDP grew 0.5% in Q1 (released 9 June), a sixth consecutive quarter of growth but insufficient to offset household affordability strain. The 36-45 age band remains the largest cohort at 37.8% and now operates at a debt-service ratio above 45%.
Avg Debt-Service Ratio
Up 5.1pp from Q1 2026
Successfully Restructured
Down 1.8pp from Q1 2026
Active & Paying
Up 2.3pp from Q1 2026
Unsecured Credit
Was 59% in Q1 2026
Peak Risk Age Band
37.8% of consumers in this age cohort
Unsecured Rate Reduction
Restructured rate averages 8.9%
This report is based on NDRC-managed matters across South Africa. It does not represent NCR-wide data, but provides national insights through real case analysis, consistent with industry standard reporting practices.
All data is anonymised and aggregated. No personally identifiable information is disclosed. This report complies with the Protection of Personal Information Act (POPIA).
External pressures shaping household debt dynamics during Q2 2026
28 May: MPC raised the repo rate by 25bp to 7.00% on a 4-2 vote (two members preferred hold). The first hike since 2023, driven by intensified inflation risk from fuel and the Middle East crisis. Prime lending rate rose to 10.50%.
Headline CPI moved from 3.1% (March) to 4.0% (April) to 4.5% (May) , the highest print since July 2024. Transport contributed 9.4% and housing & utilities 5.3%, reflecting fuel pass-through and the Eskom tariff step-up.
April recorded the largest single-month petrol increase on record. From 3 June petrol rose a further R1.43/litre while diesel eased by up to R3.23/litre , the diesel relief reflected softer global crude, while petrol remained under pressure.
Stats SA's Q1 QLFS (released 12 May) recorded unemployment rising 1.3pp to 32.7%. Labour-force participation fell to 59.0% , the lowest since 2022 , signalling widening labour-market slack alongside the cost-of-living shock.
June: NCR reaffirmed a consumer's absolute right under s86(1) to transfer debt counsellors at any stage without consent or engagement from the existing DC. Refusal is permitted only on outstanding documentation or unpaid fees; transfer requests may not remain outstanding beyond 7 business days.
Stats SA (9 June) reported a sixth consecutive quarter of growth, led by finance, agriculture and trade. Positive at the aggregate level, but insufficient to offset per-household affordability pressure at the low end of the income distribution.
Analysis of consumer income distribution and debt-to-income stress levels
Net monthly income of consumers entering debt review
Financial profile: Q2 2026 vs Q1 2026
Key Insight: Debt-service ratio rose 5.1pp to 44.4% as fuel, electricity and food costs eroded disposable income. The R10k-R20k band still accounts for 39.2% of applicants and carries the highest sensitivity to transport-cost shocks.
Breakdown of debt types held by consumers entering debt review
Secured debt (backed by assets) vs unsecured credit exposure
Home Loans, Vehicle Finance
Other Credit, Personal Loans, Credit Card, Retail Credit
Debt mix shift from 2020 to Q4 2025
Unsecured debt accounts for 61.4% of the portfolio.
Full portfolio (2020-2025)
Portfolio breakdown
| Debt Type | % of Total Debt |
|---|---|
Home Loans | 27% |
Other Credit | 30% |
Vehicle Finance | 16% |
Personal Loans | 17% |
Credit Card | 7% |
Retail Credit | 3% |
12.8%
Vehicle finance accounts for 12.8% of total debt. Unlike unsecured credit, vehicle instalments cannot be reduced during restructuring. Only the interest rate and term can be adjusted. Repossession directly affects employment mobility.
7.1%
of total debt
Short-term loans make up 11.6% of unsecured debt. These products typically carry interest rates above 60% per annum.
High-cost short-term credit is overrepresented in the unsecured exposure, pointing to severe cash-flow pressure before consumers enter debt review.
How debt restructuring reduces interest rates and repayment periods
Average interest rates before and after debt restructuring
Average duration of the debt review journey
Application
Distribution
Completion
705 days
(approx. 23 months) average time to successful completion
Average Completion Time
705 days (approx. 23 months)
Active Client Duration
925 days
(~30 months for ongoing matters)
Restructuring Impact
Unsecured interest rates dropped from 20.7% to 8.9%, a 11.9pp reduction. Average time to completion: 23 months.
NCR-registered status distribution across the managed portfolio
Completed
In Distribution
Suspended
Cancelled
Other
Breakdown by registered status codes per National Credit Act requirements. Status codes referenced in this report reflect the NCR DHS numeric coding framework.
| Code | Status Description | Category | Share |
|---|---|---|---|
03 | Completed | Completed | 29.5% |
02 | In Distribution | In Progress | 12.1% |
07 | Suspended | Exited | 33% |
06 | Cancelled | Exited | 25.3% |
04 | Other | Pending | 0.1% |
Visual breakdown of outcomes across the portfolio
41.6% of matters conclude through court-approved restructuring or full settlement, a lawful alternative to sequestration under the NCA.
The remaining 58.3% exit through lawful removal where consumers' financial positions improved or they were found not to be over-indebted. These exits are envisaged by the NCA.
Data sourced from National Credit Regulator (NCR) status code registry. Status codes defined per National Credit Act (NCA) requirements.
Age, gender, and marital status profile of debt review clients
Percentage of clients by age group
Demographic breakdown of debt review clients
53.5%
Male
46.5%
Female
Note: The 36-45 age band remains the largest cohort at 37.8%.
Debt-to-Income ratios correlated with consumer lifecycle stages
Average Debt-to-Income (DTI) ratio per age cohort. Higher values indicate greater financial stress
DTI Ratio
2.1% of clients
Entry-level earners; low balances but high fuel-cost sensitivity relative to income.
DTI Ratio
27.6% of clients
Family formation phase; transport and childcare costs absorb most disposable income gains.
DTI Ratio
37.8% of clients
Peak financial pressure; combined fuel, electricity and education costs push debt-service ratios above safe thresholds.
DTI Ratio
20.5% of clients
Consolidation phase; legacy debt from earlier years persists as new obligations accumulate.
DTI Ratio
11.7% of clients
Pre-retirement and retirement; fixed-income households absorb the largest relative cost-of-living shock.
The 36-45 cohort carries the highest DTI at 45.6% and makes up 37.8% of the portfolio. This age group typically holds the most concurrent obligations: mortgages, vehicle finance, and education costs.
Average DTI across all bands: 44.4%. The 40% threshold is generally considered the upper limit of sustainable debt servicing.
Methodology: Age is derived from RSA ID numbers; DTI ratios are calculated from Finwise budget data (total debt repayments ÷ total income). Risk thresholds: Low (<40%), Moderate (40-60%), High (60-80%), Critical (>80%).
Debt-service ratio rose from 39.3% to 44.4% in a single quarter , the largest QoQ deterioration on record. Every age band above 26 now operates at or above 42%, and the peak 36-45 cohort has crossed 45%. Fuel, electricity and food increases explain most of the reversal; the 28 May repo-rate hike removes any near-term relief.
The secured-to-unsecured split moved from 41:59 to 38.6:61.4. Credit card exposure rose 2.2pp as households turned to revolving credit to bridge affordability gaps, while "Other Credit" (payday, short-term, micro-loans) held its lead at 35.1%. This is the composition of a portfolio absorbing an income shock, not one recovering.
June's transfer guideline codifies a 7-business-day ceiling on transfer processing, prohibits re-charging of application/administration/restructuring/legal fees already paid, and confirms that a PDA statement is not proof of work done. Debt counsellors relying on procedural friction to retain files now carry direct enforcement risk. NDRC's transfer-in workflow is already aligned.
Unsecured interest-rate reductions averaged 11.9pp (pre-review 20.7% → restructured 8.9%); vehicle finance eased 3.6pp; home loans 1.1pp. Restructuring outperforms every other affordability lever available to consumers at these income bands.
Stats SA's Q1 QLFS put unemployment at 32.7% (up 1.3pp QoQ) with labour-force participation at 59.0% , the lowest since 2022. Suspension share in the portfolio rose to 33% as more consumers moved through payment interruptions rather than outright cancellation, consistent with job-loss and short-time signals in the labour data.
With CPI at 4.5% and the repo rate now at 7.00%, the July MPC decision (23 July) will determine whether Q3 sees further tightening or a hold. Sustained diesel relief and a stable rand may cap fuel pass-through, but any escalation in imported oil costs will pressure the R10k-R20k income band , still 39.2% of applicants , hardest.
This report is based on anonymised data derived from debt review and debt review removal matters managed by The National Debt Review Center across South Africa. The data reflects operational outcomes within the NDRC client base and is not presented as a comprehensive reflection of all debt review matters nationally.
Percentages, averages, and timeframes reflect observed patterns within the reporting period and may vary depending on creditor behaviour, court scheduling, and consumer compliance. Where approximations are used, they are clearly indicated and applied conservatively.
The National Debt Review Center is a registered debt counselling practice operating in terms of the National Credit Act. All observations are presented for educational and policy discussion purposes and do not constitute legal advice.