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Cape Town - Trade and Industry Minister Rob Davies insisted on Tuesday that stricter affordability testing was the industry's answer to objections about the removal of adverse credit information.
He acknowledged fears that this would heighten the risk and cost of credit, but said the government was intent on pushing ahead with the measure, which will result in the debt rehabilitation of 1.6 million blacklisted consumers.
"We can't sit in the middle. There is a strong desire to have this," Davies told reporters in Cape Town.
Opponents of the move contended it would create indebtedness among people not in a position to settle debts.
"I think we have got an answer to that and we need to refine that answer a bit," he said.
"We need to develop some specific guidelines and frameworks, but we are not ignoring anybody."
The removal of adverse credit information was approved by the cabinet last month.
It will result in the immediate and ongoing rehabilitation of blacklisted consumers who have paid their debt, but are still prevented by credit bureau listings from getting loans, housing and sometimes jobs.
Davies said more than two-thirds of the submissions received in a month-long period of public consultation were positive.
Among the critics have been the Banking Association of SA and Moody's ratings agency, which said it could create a bigger risk of borrowers defaulting because it would reduce the amount of information available to banks.
Davies said the department would meet the Credit Bureau Association next week to try and address concerns and ensure that some of the feared risks would be mitigated by a more rigorous affordability assessment.
He suggested that the extent of irresponsible lending was illustrated by the number of garnishee salary deductions from mine workers at Marikana, and the fact that some had up to 80% of their wages committed to these orders.
"What happens if you have a garnishee order is you don't have to take the risk, you don't have to make the assessment because actually what happens is they work for somebody and your money is safe," he said.
In a subsequent speech to the National Council of Provinces, Davies said the National Credit Regulator was working on introducing affordability assessment guidelines.
The so-called credit amnesty's benefits to blacklisted consumers includes that they will no longer pay to have their names removed from credit bureaus, and will no longer have to wait as long as a year or two for this to happen.
"These changes are fair and will provide an incentive to consumers to pay the debts, while also benefiting credit providers."
Davies said the department intended putting an end to the use of credit reports when people applied for jobs that did not entail professional financial responsibility.
"[It] needs to be arrested immediately, as it impacts on employment opportunities of many consumers when this country has such high unemployment figures."
He said the department had made proposals to close loopholes in the National Credit Act to provide succour to debtors.
These aimed to prevent credit providers from pursuing a court process when debt counselling had been initiated, and to address the plight of consumers who had paid off short-term debt but remained unrehabilitated because debts like home loans took longer to settle.
"The amendment thus seeks to also bring about early rehabilitation of consumers to enable them to interact with the economy further," he said.
The minister brushed aside a question that the measures and the imminent implementation of the removal of credit information would prove a boon for the African National Congress in next year's national election.
"I reject with contempt any suggestion that this is an election stunt."
