13 nabbed for unlawful lending

Moeshfieka Botha
2013-06-11 14:53
Post a comment 5
(File, supplied) ~ Supplied
Cape Town - The National Credit Regulator is clamping down on unscrupulous micro-lenders, with the police arresting thirteen people in the Northern Cape for contravening the National Credit Act.

The micro-lending industry in the province is believed to be flourishing because of the lack of economic opportunities, which is leading to severe poverty.  

In a bid to stem the abuse of consumers by lenders and ensure compliance with the National Credit Act (NCA), the National Credit Regulator (NCR) and the South African Police Service (Saps) conducted a joint on-site investigation, in an initiative named 'Operation Siyanda'.

The NCR partnered with the Saps and the Directorate of Priority Crimes and Investigation in Upington, Keimos, Kakamas and Groblershoop to investigate 32 lenders.

During the operation, 13 people were arrested and as a result 11 criminal cases were opened.

 In addition, the suspects were found to be in possession of 5 453 pension cards, 130 ID books and 1 720 bankcards.

"The focus of this kind of operation is primarily on credit providers who are unlawfully garnishing, retaining pension cards, bank cards, identity documents and personal identity numbers (PIN) of their clients as surety," said Nomsa Motshegare, CEO of the NCR, in a statement on Tuesday.

"This is a contravention of the National Credit Act and it is a criminal offence", she added.

Johann Magerman, managing director of the NGO You and Your Money, that has been promoting financial literacy and education in the Siyanda and Namaqua districts for the past 7 years, welcomed the probe.

“These criminal activities by micro-lenders have been happening for years. Many people are scared to come forward. I hope this action by the Saps will go a long way to helping people speak out and regain their financial dignity.”

Motshegare said this operation was not the last of its kind and that it is conducted nationally in different parts of the country.

“Credit providers should be warned that the NCR will not condone any contraventions by credit providers", she said.

Magerman also voiced his concern about the overall lending crisis in South Africa. He said that what is happening in the Northern Cape is indicative of a nationwide problem.

“The poor and disenfranchised are being exploited by this sort of cowboy mentality lending.

“Tough action and regulation is needed against the transgressors,” Magerman urged.

Add your voice on the Debt Issue:

*Ask our experts
*Share a personal story
*Write a guest post

  - Fin24




Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
5 comments
Add your comment
Comment 0 characters remaining