In the study, I use the Boone indicator to explore competition dynamics in the South African loan market. Using a standard pooled OLS estimation, I find that competition in the loan market has been improving for most of the period between 2006 and 2016. Between 2006 and 2014 the trend is upwards before reversing between 2014 and 2015 and then normalizing from 2015 onwards. Another important result that is obtained from the Boone indicator is the strength of the relationship between efficiency and competition. From the results, it is not clear that more efficient firms gain greater market share. Therefore, I conclude that there are various exogenous factors that inhibit the sector from functioning optimally. Namely, regulatory, financial and information barriers. Accordingly, I recommend overcoming these factors to optimize the functionality of the sector. Recommendations include consolidating regulatory bodies, redesigning penalties, minimising switching costs and forcing innovation and interoperability.