Altron FinTech Household Resilience Index performs well during the first quarter of 2026, but flags the urgent need for formal sector job creation
In recognising the need for data that provides more clarity on the financial disposition of households in general, and their ability to cope with debt in particular, Altron FinTech commissioned economist and economic advisor to the Optimum Investment Group, Dr Roelof Botha, to assist in designing this index. The index comprises 20 different indicators, all of which are directly or indirectly related to sources of income or asset values. The AFHRI is weighted according to the demand side of the short-term lending industry and calculated every quarter, with the first quarter of 2014 being the base period, equalling an index value of 100. All the indicators are expressed in real terms, i.e., after adjustment for inflation.
Johannesburg, 29 October 2026 – South African households improved their financial resilience for the ninth consecutive quarter in the three months to June 2026, according to the Altron FinTech Household Resilience Index (AFHRI). However, the pace of improvement has slowed almost to a standstill as fuel prices climb and interest rates turn higher.
The seasonally adjusted index rose to 116.1 in the second quarter, 16.1% above its base in the first quarter of 2014 in real terms. It grew by just 0.1% on the previous quarter and 1.5% year-on-year, a marginal gain once population growth is taken into account.
Figure 1: Altron FinTech Household Resilience Index (AFHRI), Q2 2026. Index; Q1 2014 = 100.
Lower interest rates did most of the work
Lower interest rates between September 2024 and May 2026 did most of the work. The ratio of household income to debt costs rose 4.8% year-on-year, bank credit impairments improved, and household consumption and disposable income both grew in real terms. Unit trust assets were the strongest performer, up 8.9% year-on-year.
The labour market is the weak point. Private-sector salaries fell 1.8% in real terms over the year, private-sector employment grew by only 0.5% and public-sector employment fell 3.5%. Civil debt defaults also deteriorated sharply.
Figure 2: Formal employment and total unemployment (broad definition), millions. 4-quarter average; Q2 2026 = actual. Source: Stats SA.
Faster growth than GDP since the rate-cutting cycle began
Since the rate-cutting cycle began in September 2024, the AFHRI has grown at an average of 2.4% a year in real terms, double the 1.2% recorded by GDP over the same period. It is the only measure in the index’s long-run comparison to outpace population growth.
Figure 6: Total household debt as % of GDP, selected countries (2025). Sources: SARB; Stats SA; IMF.
The South African Reserve Bank has since raised the repo rate twice, in May and September, taking the prime lending rate from 10.25% to 10.75%. According to Dr Roelof Botha, the economist who compiles the index, the recent rise in inflation stems mainly from fuel prices and global freight costs linked to conflict abroad, rather than from domestic demand.
Figure 3: Altron FinTech Household Resilience Index (AFHRI) and the prime rate. Seasonally adjusted AFHRI. Sources: Altron FinTech; SARB.
Dr Botha points to several positives: progress on electricity market reform, Moody’s revision of South Africa’s sovereign outlook to positive, a strong rand and firm platinum group metal prices. An easing in global oil prices would quickly restore momentum to household finances.
Johan Gellatly, Managing Director of Altron FinTech, said:
“After nine quarters of improvement, households are holding their ground, but only just. What concerns me in this quarter’s numbers is where the support is coming from. Lower interest bills and investment returns have carried the index, while private-sector wages fell in real terms and civil debt defaults rose. That is a household sector living off its balance sheet rather than its pay cheque. With prime up 50 basis points since May and fuel costs still high, that cushion is getting thinner. Lasting resilience will only come from wage growth and new jobs, and that is the measure policymakers should be watching.”