ANC Calls For An Introduction Of A Once-off Debt Forgiveness Programme For Forced Retrenched Workers

20 May 2016

The recent slump in commodity prices and other negative global factors have negatively impacted the South African economy. Many sectors of the economy have had to retrench workers, leaving many families without livelihoods. The mining and steel industries in particular have experienced many retrenchments over a sustained period of time.

The retrenchment of workers impact on their ability to repay credit they borrowed from banks and other lenders. Houses and motor vehicles of these workers are being repossessed and many families are at the risk of being homeless.

Many low-income workers who have been retrenched have unsecured and short-term loans. The ANC has been concerned about the growth in unsecured and short-term lending to low income consumers in a credit market where half of the consumers are struggling to repay their loans.

The ANC calls for a once-off introduction of a debt forgiveness programme to assist retrenched workers. Consideration should be given to use the surpluses of government entities and to encourage lenders to voluntarily participate in the programme.

The loans of retrenched workers need to be investigated by the National Credit Regulator to identify those that have been granted recklessly. To this end, the powers of the National Credit Regulator should be enhanced to conduct these types of investigations and to impose fines for reckless lending. Other regulators locally and internationally have similar investigation and enforcement powers.

The Minister of Trade and Industry, Dr Rob Davies, will consult on the matter before beginning the process to introduce the debt forgiveness programme and legislation to enhance the powers of the National Credit Regulator.

Issued by Joan Fubbs, Chairperson of the ANC Study Group on Trade and Industry, 20 May 2016