CAPE TOWN - The National Assembly on Wednesday passed the National Credit Amendment Bill. The bill will be sent to the National Council of Provinces for consideration.
In a statement, The Chairperson of the committee, ANC MP Joanmariae Fubbs said the Bill which was adopted on the 5 September 2018 will provide relief to over-indebted South Africans who have no other effective or efficient options to extract themselves from over-indebtedness.
“This Bill will strengthen the National Credit Amendment Act which enabled South Africa to withstand the worst effects of the global financial meltdown in 2008,” said Fubbs.
Fubbs added that for the first time in SA, this bill will address the plight of the poor and low-income worker who is over-indebted.
Fubbs explained to the National Assembly that the bill will allow for intervention for over-indebted consumers earning R7 500 per month or less.
The first step in the intervention process involves debt restructuring giving consumers five years to pay their debt.
If this is not possible, the credit agreement will be suspended for 12 to 24 months but there will be regular reviews, Fubbs added.
“If after two years a consumer is still not in a position to repay his or her debt, then extinguishing the debt, or a percentage of the debt will be considered,” said Fubbs.
For debt to be to be removed once all other measures have been exhausted and it comes with conditions.
These conditions are when consumers cannot acquire more debt from the date of their application of relief.
According to Fubbs, the bill will also encourage and enforce responsible lending and borrowing as illegal lending will be criminalised. This means unregistered lenders will be arrested.
Fubbs added that the bill will allow magistrates to make rulings on reducing interests on loans to as little as zero percent to enable consumers to repay their debt.
According to a report by Fin24, not everyone welcomed the passing of the new bill and concerns aroused.
The report stated that DA MP Dean Macpherson felt that the amendments will increase the cost of credit and restrict access to credit.
He also raised concerns as to whether the Consumer Tribunal and National Credit Regulator would be able to handle the applications.
Inkatha Freedom Party MP Jan Esterhuizen also criticised the bill, saying that it will discourage consumers from managing their own credit responsibly.