ANC welcomes adoption of National Credit Amendment Bill
29 August 2018
The African National Congress (ANC) in Parliament welcomes the adoption of the National Credit Amendment Bill by the Portfolio Committee on Trade and Industry today.
The ANC Study Group on Trade and Industry introduced the Bill as a Committee Bill in order to provide debt relief intervention for the marginalised poor. This was motivated by the fact that the South African natural insolvency system remained largely creditor-oriented and excludes the poor from the process, which is contrary to international trends and best practice.
The current statutory measures offering debt relief (i.e. sequestration; administration and debt review) require some form of disposable income or assets that limit access by the poor on financial grounds. The ANC was of the view that this constitutes unfair discrimination based on socio-economic status and also undermines the dignity of affected consumers. These exclusions accordingly affect the equal enjoyment of rights as envisaged in Section 9 and the right to dignity as envisaged in Section 10 of the Constitution.
The ANC welcomes the fact that the Bill introduces debt intervention measures to low income consumers who are over-indebted. There will now be a long-term intervention, similar to debt review, which will be administered and processed by the National Credit Regulator. This process will be free for the targeted group and the order will be issued by the National Consumer Tribunal.
In addition, there is a short-term intervention that allows for the extinguishing of debt for those consumers who are either unable to pay their debts at all or to repay all the debt within 60 months. This intervention will be available for 4 years after the implementation of the Bill. To qualify, a consumer must not have more than R50 000 unsecured debt, and earn no more than R7 500.
The Bill also gives additional powers to Magistrate Courts to lower interest rates based on a debt counsellor’s recommendation on behalf of a debt review applicant. In issuing regulations, the Minister must consider the industry’s existing voluntary Task Team Agreement, especially the differentiation between secured and unsecured loans and the principle of incrementally and proportionally reducing interest rates, fees and other charges.
We believe that this piece of legislation takes us a step closer in addressing legislative gaps that limit access to debt relief measures for the marginalised poor. The ANC wants to reiterate that at no time was there any attempt on its part to delay the processing of the Bill. The plight of the poor remains at the forefront of our priorities.
The ANC would like to thank the Committee and government departments, as well as stakeholders, for their participation in the extensive process of consultation undergone in developing this legislation.
The National Credit Amendment Bill will now be scheduled for adoption by the National Assembly.
Issued by Nonceba Mhlauli on behalf of Whip of the ANC Study Group on Trade and Industry, comrade Bheki Radebe, 29 August 2018