Rethinking conspicuous consumption: What South Africa gets wrong about spending, saving and survival
By Cowhan Govender, Group Head of Personal Banking at Standard Bank Personal and Private Banking
For years, a familiar narrative has shaped how we understand South African consumers: they are over-indebted, under-saving, and prone to conspicuous consumption. It is a narrative reinforced by statistics, the low household savings rate, rising unsecured lending, and high levels of personal debt. On the surface, the conclusion seems obvious. But it is also incomplete.
To truly understand financial behaviour in South Africa, one must move beyond spreadsheets and into lived realities in rural villages, townships, and informal settlements. There, a very different story unfolds. It is 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-and-mortar homes rising from modest surroundings. These are not anomalies. They are 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?
Is it always conspicuous 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 that 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 largely earned in cash or the absence of formal collateral mean that 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 don’t have formal financial records or collateralisable assets. Their usage of unsecured lending, in this context, 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 there were none. It pays school fees that unlock future earning potential. It buys vehicles that are not status symbols, but lifelines that enabling 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.
The savings invisible to the financial sector
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 across communities. According to the National Stokvel Association of South Africa, more than 11 million South Africans participate in stokvels, with over R50 billion circulating through these schemes annually. This figure excluding 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 in 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 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. In fact, 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.
So 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 the diversity of our 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 the 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 – growth that 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.