It is hard to imagine a more difficult time for the government to implement changes to the National Credit Act (NCA) or at least to implement changes that would see information relating to consumer debt being expunged by the credit bureaus.

Gerrie Fourie, the newly appointed chief executive of Capitec, is the latest industry player to voice concerns about the chilling effect this would have on lending. Fourie urges the regulators and industry players to tighten up on the implementation of the existing regulations rather than look to adding more.

The Department of Trade and Industry’s parliamentary portfolio committee is considering amendments to the NCA. Joan Fubbs, the chair of that committee, has reassured the industry that it is not the intention to “destroy the banking industry” but rather to introduce robust legislation that would be equitable, fair and efficient and that would “truly transform the economy and move it in the direction we’ve wanted it to go since 1994”.

The major difficulty that exists relates to consumers being over-extended, in part because access to credit has been easier since the introduction of the NCA in 2007 and in part because of unscrupulous lenders who have not enforced the affordability and other criteria required by the act. This in turn has led to the “unsecured lending” debacle, which has impacted upon most banks and credit retailers. It has also created frequently devastating problems around the use of garnishee orders.

Senior officials from the National Treasury now say that the regulators have not been tough enough over the past five years and that they were under pressure to encourage lending, “so as not to be party poopers”.

There was an unfortunate sequence of events after the introduction of the NCA, with the global financial meltdown in 2008 followed by a massive blow to the local economy in 2009. The soccer World Cup insulated us but now the full pain will be felt.

Rising and shining

“If we are wrong, we are too early,” says Tsogo Sun’s chief executive Marcel von Aulock, of the group’s bold strategy to spend R6 billion on building and refurbishing in an environment where the consumer is rolling with the punches of a steadily weakening rand, higher inflation, higher petrol prices and unbridled pessimism.

Von Aulock only offers a cursory acknowledgement of the hard times across the board, he firmly believes that it is a short-term spell, that over the long haul it can only get better. Speaking yesterday at the launch of the Sky Venue, the multi-purpose nest sitting upon the Maharani hotel and overlooking the Indian Ocean, Von Aulock’s confidence is understandable.

The venue is an old icon resurrected. It used to be a nightclub with an outside lift facing the beachfront. Tsogo sun is unveiling its jewels as fast as it is putting them up.

After the Gauteng Gaming Board last year granted an increase in gaming licences, the group started on the R560 million Silver Star development. At Gold Reef City, it is spending R360m on sprucing up the place as the major Gold Reef theme park, including the mines museum and extensions to the apartheid museum.

The big announcement, though, was that Tsogo is planning a R1.8bn revamp of the Suncoast development on the Durban North Beach. This includes the construction of a destination mall.

Why and how all this when rival Sun International is hanging over the precipice? It recently gave notice to axe 1 700 workers because of tough times. “Maybe one of us is wrong,” Von Aulock shrugs, pointing out that 20 percent surge in earnings is perhaps a fairer judge.

Edited by Peter DeIonno. With contributions from Ann Crotty and Banele Ginindza.