New South African bill providing debt relief is in the final stages

How heavily indebted are you?

Well, there might just be relief for you.

Parliament is in the final stages of processing a draft bill that seeks to extinguish the debt of consumers who earn a gross monthly income of no more than R7,500 have unsecured debt amounting to R50,000 and who have been found to be critically indebted.

Treasury estimates this could write-off between R13bn and R20bn.

Cosatu has written to the President to make sure the bill is adopted, fearing pushback that could see it delayed or even quashed.

The Banking Association says the bill is likely to hurt the very people it purports to help and gives the Minister of Trade and Industry too much discretionary power.

READ:How to resist the temptation of taking on unplanned debt

Speaking to Bongani Bingwa, CEO of the SA Banking Association Cas Coovadia says they are concerned that the bill in its current form would create constitutional issues.

And two, I think that if we deal with this in a way that increases the risk of doing lending and this could actually contract the cost of living to people who actually need that credit.

Cas Coovadia, CEO SA Banking Association

We are not for one moment saying that we don't need to deal with over-indebted people who have no income or assets.

Cas Coovadia, CEO SA Banking Association

We have various voluntary programmes in place that we believe are working and we have informed the portfolio committee.

Cas Coovadia, CEO SA Banking Association

Cosatu Parliamentary Coordinator Mathew Parks also spoke to Bingwa and says they want to get the bill fast-tracked.

It is, in fact, ready, it has been through Parliament for more than a year now.

Mathew Parks, Cosatu Parliamentary Coordinator

And it is ready to be adopted by the portfolio committee. It is actually being delayed and that is one of our worries.

Mathew Parks, Cosatu Parliamentary Coordinator

He adds that the Banking Association has sort to collapse the bill.

Listen below to the full interview:


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