Trade and industry department director of lotteries law and policy Tebogo Tsotetsi speaks at an education and awareness campaign in Makeleketla, Winburg. Photo: Supplied (dti)

Winburg - Trade and industry department (dti) director of lotteries law and policy Tebogo Tsotetsi has urged community members at Makeleketla in Winburg in the Free State to work together to stop illegal microlenders operating in their areas.

Speaking during a national education and awareness campaign on key legislation of the dti, Tsotetsi said the purpose of taking the campaign to the Free State was to inform local communities about their consumer rights and responsibilities which were being violated on a daily basis due to a lack of information.

“We maximised an opportunity to empower the community about their rights as consumers, especially in their everyday dealings with the credit industry. It is obvious that credit consumers are taken for granted and their consumer rights are frequently violated by the credit providers,” she said.

Microlenders, commonly referred to as abomashonisa, were illegal and unregulated and thus were not affected by the National Credit Act (NCA).

“They are widely understood to be ruthless operators playing hard in a brutal market and are reputed to employ sometimes excessively robust collection methods and by definition, their customers do not enjoy legal protection.

"We have realised that we will never completely stop the ongoing underground lending, as the biggest challenge is that community members protect these microlenders. However, the change in legislation will make it easier to close them down,” Tsotetsi said.

She urged unregistered credit providers to register as credit providers because failure to do so could result in credit agreements being nullified.

African News Agency (ANA)