COWHAN GOVENDER | SA’s household savings rate goes beyond spreadsheets

For years, a familiar narrative has shaped how we understand South African consumers: they are over-indebted, under-saving and prone to conspicuous consumption. This narrative is reinforced by statistics — low household savings rate, rising unsecured lending and high levels of personal debt.

On the surface, the conclusion seems obvious. But it is incomplete.

To truly understand financial behaviour in South Africa, we must move beyond spreadsheets and into the lived realities of rural villages, townships and informal settlements. There, a very different story unfolds — a story not of reckless consumption, but of aspiration, resilience, and, in many cases, investment under constraint.

Drive through parts of the Eastern Cape or into KwaZulu-Natal and you will encounter a striking visual contradiction to the “dissaving” narrative: large, modern brick homes rising from modest surroundings. These are not anomalies; they’re increasingly common symbols of progress built not through inherited wealth or traditional mortgage finance but often through years of incremental investment funded by unsecured credit.

And here lies the uncomfortable question: why do we label this as consumption?

If the same home were financed through a traditional mortgage, it would correctly be classified as an asset — an investment in long-term wealth and stability. Yet when the same goal is achieved through personal loans or credit cards, it is too often dismissed as evidence of financial imprudence.

This is not just a semantic issue. It reflects a deeper structural bias in how we define “good” financial behaviour — one that privileges access to formal, secured credit and penalises those who must navigate the system differently.

For millions of South Africans, secured lending is still not an option. Irregular income streams, often earned in cash or the absence of formal collateral, mean the path to asset ownership looks very different. Finscope estimates that South Africa has 3-million micro businesses generating R5-trillion in turnover and sustaining 13-million jobs. Many people operating in this economy lack formal financial records or collateralisable assets.

In this context, their use of unsecured lending becomes not a sign of excess, but a tool of necessity — and how that tool is used matters. Yes, unsecured credit can fund consumption. But it can also fund transformation. It builds homes where none existed. It pays school fees that unlock future earning potential. It buys vehicles that are not status symbols, but lifelines that enable people to access work opportunities, arrive on time, and maintain employment in an economy where public transport is often unreliable.

In these cases, what may appear as conspicuous consumption is, in reality, a survival strategy — and, at times, a form of long-term investment.

Stokvels continue to grow, mobilising billions of rand across communities

The same misreading applies to how we measure saving. South Africa is often labelled a nation of “dissavers”, yet this view relies heavily on formal financial data and overlooks a deeply embedded culture of collective saving outside traditional systems.

Stokvels continue to grow, mobilising billions of rand across communities. According to the National Stokvel Association of South Africa, more than 11-million South Africans participate in stokvels, with over R50bn circulating through these schemes annually.

This figure excludes informal schemes among families and friends. Because contributions are often pooled into a single account, only one account holder is visible in the formal system, making many savers appear absent from the data. What looks like low individual saving masks widespread collective discipline. This is not a failure to save, but a different model of saving.

The same applies to spending patterns. Investments in housing, education, or small businesses are often not reflected in conventional metrics. A household may show little liquid savings while actively building a home or funding education. It is, in fact, actively investing in physical and human capital with long-term value.

This raises a critical point: not all forms of saving are visible, and not all forms of consumption are wasteful. Many South Africans who appear over-leveraged on paper may, in reality, carry smaller total debt burdens than those with access to secured finance. The difference lies not in the scale of borrowing but in its structure. It’s shorter-term and unsecured — which certainly makes it riskier — but not inherently less purposeful.

Perhaps the real issue is not that South Africans are failing to save or investing poorly. Perhaps it is that our frameworks for understanding financial behaviour have not kept pace with the realities of our diverse economy. We continue to measure financial health through a narrow lens that overlooks informality, access constraints and cultural practices. In doing so, we risk misdiagnosing the problem and misdirecting solutions.

To improve financial inclusion and economic resilience, we must start by acknowledging this complexity. Financial progress is not linear for many South Africans. It does not begin with savings accounts and end with asset accumulation.

For the financial sector, this demands a rethink of what constitutes saving, how credit is assessed beyond traditional models, and how solutions can better bridge unsecured lending and long-term asset building. It also requires deeper engagement with informal saving systems as partners in expanding access and trust.

At Standard Bank, this perspective shapes our commitment to driving Africa’s growth, which is not uniform but grounded in diverse realities. Challenging the notion of conspicuous consumption is not about ignoring the risks of debt; it is about recognising the intent, context and outcomes behind financial choices. Ultimately, the issue is not whether South Africans are spending or saving enough, but whether we understand their contexts — whether we “see” them.

• Govender is group head of personal banking at Standard Bank Personal and Private Banking