Wouldn’t it be nice to borrow money and not ever have to worry about paying it back?— Bruce Whitfield, The Money Show
President Cyril Ramaphosa has signed the National Credit Amendment Bill.
The so-called “Debt Relief Law” will allow some applicants to write off debts they owe to banks and other credit providers.
The unsecured debt is less than R50 000.
- The debtor earned less than R7500 per month over the past six months.
It's disappointing that after our petition, the president made no attempt to interact with the industry and understand our concerns. This is an issue of serious concern. This could have serious economic implications. We will await the gazetting of the bill and details around its implementation. We will sit down and consider our other options.— Cas Coovadia, Managing Director - Banking Association of South Africa
Debts worth R13.2 billion to R20 billion could be written off under the new law, according to Treasury.
South Africa’s banks will have to price in increased risks through higher interest rates or completely stop lending to low-income clients, according to Cas Coovadia, Managing Director at the Banking Association of South Africa.
Listen to the interviews in the audio below (and scroll down for quotes from it).
This is serious… it brings moral havoc into the system… If I don’t have to repay why should somebody else?— Cas Coovadia, Managing Director - Banking Association of South Africa
There are 9.4 million people with outstanding unsecured debt under R50 000…— Cas Coovadia, Managing Director - Banking Association of South Africa
The National Credit Act… can regulate reckless lending… The National Credit Regulator has the powers to do that… Banks have their own restructuring schemes… If we got clear support from the regulator… we can achieve what this act is trying to achieve…— Cas Coovadia, Managing Director - Banking Association of South Africa
I’m not too sure what the rationale on the part of Government is…— Cas Coovadia, Managing Director - Banking Association of South Africa
Don’t make it difficult for formal, heavily regulated lenders… Surely, we don’t want to force people into informal lending…— Cas Coovadia, Managing Director - Banking Association of South Africa
They’ve gone too far. This is not good for consumers… There comes a time when you can actually overdo things and overcook it…— Stephen Logan, Consumer Advocate - Fair Credit & PrivySeal
The risk for the credit industry is so immense… it will backfire… They will be inundated with applications… This is completely unworkable… When all of the dust settles… I just can’t see how they [lenders] will possibly carry on… This is just absolutely awful for consumers.— Stephen Logan, Consumer Advocate - Fair Credit & PrivySeal
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