Related Articles
Top Stories
May 23 2012 09:47
Western investors must realise SA does not need their money as it can now turn to fellow Brics members for funding, says ANC secretary general Gwede Mantashe.
May 23 2012 08:10
Several parties, including government, have launched a Constitutional Court appeal against an interdict temporarily halting the e-toll project, Outa says.
May 23 2012 18:03
Facebook and banks are being sued by Facebook's shareholders, who claimed the defendants hid Facebook's weakened growth forecasts ahead of its initial public offering.
Johannesburg - The country's biggest microlender, African Bank Investments Limited, said on Monday that the new National Credit Act (NCA) has allowed it to address a wider market than was previously possible and move beyond the R10 000 loan limit.
The bank said it believes that the introduction of the NCA will in time have a profound effect on the landscape of the credit markets in South Africa, particularly within the target market of the Abil group. For this reason, it took a proactive approach to the NCA and at an early stage adopted many of the required changes, so that it could focus on the opportunities that emerged as a result of the NCA.
"In particular, these opportunities have allowed us to move beyond the R10 000 loan limit and 36-month term barriers imposed by the Exemption Notice to the Usury Act, to risk price products more appropriately, roll out our credit card product more extensively, and to address a wider market than was previously possible.
"In addition, we believe that a more competitive and unified market will, over time, grow the overall size of the credit market (as observed in other industries) and we have positioned our strategies to take advantage of this.
"We also believe that as the market converges, becomes more competitive and products commoditise, there will be a greater degree of importance placed on pricing, customer service levels and convenient distribution.
"Being a specialist credit provider, Abil is well positioned to take advantage of these trends," the group said.
It added that the introduction of the NCA unified, under a single regulatory framework, the previously three separate credit markets that operated within SA, namely the Usury Act, the Credit Agreements Act (CCA) and the Exemption Notice to the Usury Act.
The conversion process had differing implications, depending from which regulatory regime a credit provider was migrating. For example, the NCA requires much greater focus on affordability than the Usury Act, the new price caps placed a challenge on lenders under the exemption notice, while lenders under the CCA had to change pricing structures and documentation standards extensively.
This, together with varying degrees of preparedness by participants in the industry, resulted in a wide disparity of reported impacts on credit providers during the first few months after the 1 June 2007 implementation date. Inevitably though, these initial disruptions will settle and the markets will begin to converge and normalise, ABIL said.
- I-Net Bridge