Youth Capital is deeply concerned about the changes to the National Credit Act (NCA) introduced by the Department of Trade, Industry and Competition. These changes will have a big impact on young people across South Africa. Tertiary students and recent graduates will be the most affected, as many already face challenges in accessing education, securing decent work and participating fully in the financial system.

The amendments are intended to strengthen consumer protections by regulating how credit is granted and repaid. ‘Youth Capital welcomes efforts to ensure that young people, who are often first-time borrowers, are safeguarded against unfair lending practices’ says Buhle Magwaza, Project Lead at advocacy campaign Youth Capital. ‘But these amendments can cause harm to young people, as students and hustlers turning to entrepreneurship as a survival strategy in the face of record unemployment,’ adds Magwaza.

Youth and Debt: A Precarious Landscape

For many young South Africans, taking on debt is not a choice; it is a necessity. Whether in the form of student loans, store accounts, or informal borrowing, credit often represents the only route to access higher education, cover the costs of job-seeking, cover some start-up costs, or meet basic needs. But in a country where youth unemployment remains the highest in the world, many young people struggle to repay these debts through no fault of their own.

In Q2 2025, youth unemployment reached crisis levels: 71.7% for 15-24-year-olds and 49.5% for those aged 25-34, compared to a national rate of just 33.2%. Additionally, 43.9% of young people aged 15-34 were not in employment, education, or training (NEET). ‘These numbers illustrate how young people are not failing to repay debt out of irresponsibility; they are being set up against impossible odds in a system that denies them both work and opportunity’ says Magwaza.

Under the proposed NCA framework, defaults are treated as individual failures, with severe consequences such as blacklisting, garnishee orders, and long-term exclusion from formal financial systems. ‘These outcomes can entrench disadvantages: closing doors to further education and training, housing, entrepreneurship, and even employment opportunities that require a clean credit history,’ adds Magwaza.

These amendments effectively punish young people for being in debt. The tightening of regulations carries a clear undertone of penalisation. By focusing mainly on compliance and repayment, the system risks portraying debt default as a personal failure. ‘Doing this means ignoring the real, structural drivers of debt: the unaffordability of higher education, the high costs of looking for work, and the limited pathways to decent jobs. It also overlooks the precarious reality of entrepreneurship for young people who have no safety nets, says Magwaza.

Without complementary measures such as income-contingent repayment systems, debt relief schemes, and more robust public investment in education and self-employment support. These amendments risk further entrenching cycles of exclusion. The danger is clear: rather than protecting youth, the credit system could punish them for systemic failures beyond their control. ‘An example is the steady increase of graduate unemployment now at 12,2%, showing that a qualification does not guarantee protection from exclusion. Penalising defaults without structural reforms will deepen this trap,’ says Magwaza.

A Call for Youth-Centred Reform

As a campaign advocating for policy change to solve unemployment, Youth Capital believes that education and training should be a bridge, not a barrier. To truly serve young South Africans, the credit system must balance consumer protection with structural support. That means:

• Expanding public investment in higher education and training, so that fewer young people are forced to rely on loans in the first place.
• Designing repayment systems that are linked to income and employment realities, recognising that young people often enter precarious labour markets.
• Ensuring access to debt relief mechanisms for those trapped in cycles of poverty and unemployment.
• Institutionalise mentorship and financial literacy support for young people who take the self-employment route.
• Creating pathways for financial rehabilitation, so that a period of hardship does not permanently exclude young people from economic opportunity.

Building Futures, Not Punishing Struggles

South Africa cannot afford to criminalise the struggles of its youth. At a time when young people are carrying the weight of systemic unemployment and inequality, policies must open doors rather than close them. Protecting youth from exploitative debt while investing in accessible education and fair work opportunities is not just a matter of fairness; it is an economic and democratic imperative.

Youth Capital calls on policymakers, financial institutions, and civil society to come together with young people to build a system that recognises their potential and invests in their futures, strengthening enablers. Debt should never be a life sentence.

For interviews with Youth Capital, contact Clotilde, 082 6815927.