'For many young consumers the first credit experience is becoming more controlled and more deliberate.'
For many young South Africans, the first step towards credit no longer looks like a store account, credit card or personal loan. It is increasingly digital, tied to a specific purchase, and built around smaller, more manageable commitments.
TransUnion Research It was revealed that Buy Now, Pay Later (BNPL) has the youngest consumer profile among all consumption credit products, with 37% of BNPL users belonging to Gen Z.
It also found that 16.5% of BNPL users are new to credit, while another 19.7% are disadvantaged consumers with limited credit history.
Young people are not taking loans carelessly
PayJustNow chief operating officer Dean Hyde says TransUnion's research shows that young South Africans are not taking out loans recklessly.
Instead the data points to smaller commitments, clear repayment periods and products linked to specific purchases.
“The first credit experience for many young consumers is becoming more controlled and more intentional,” says Hyde.
“Many are starting with transaction-linked products that have clear repayment structures. Confidence is built through small, well-managed commitments.”
Youth prefer short-term loans
Hyde says that according to data from PayJustNow, the average basket size of BNPL is around R1 500, indicating short-term, planned buying.
'Pay in 12', PayJustNow's retail credit product, is being used for larger planned purchases, with the average basket size being around R2 500.
“Over the last 12 months, the average ‘Pay in 12’ basket size was 74.9% larger than the BNPL basket size,” he added.
“Together, this suggests responsible experimentation with credit, where BNPL acts as an entry point for smaller, purchase-linked commitments, while Pay in 12 supports larger baskets in categories such as home, major appliances, furniture and automotive.”
flexi-loan product
Hyde says Finchois is seeing similar results. According to the digital financial services platform, people aged 25 to 34, predominantly women, use MobiMoney, a short-term credit product with a tenure of three months, for immediate needs and emergencies.
According to FinChoice, six-month flexi-loan products are also popular among consumers aged between 20 and 30.
Richard Eberlein, head of customer development and engagement at Finchoice, says young South Africans are becoming more thoughtful about credit products tailored to specific needs.
“Younger consumers are not looking for one financial product to solve everything,” he says.
“They want options that fit where they are in life, whether it's a short-term break, an urgent household need, or a larger planned expense. The key change is that they are not treating all credit the same.”