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Support for tighter credit regulation

Mar 12 2014 18:11
Cape Town – While the national credit amendment bill faces strong opposition from many credit lenders, wanna loan? said it supports stricter regulation.

wanna loan? says that tighter regulation will protect South African consumers from reckless lending that leads to over-indebtedness.

“A well regulated environment will help to rid the industry of unscrupulous lenders who’ve caused the industry’s reputation to become tarnished over the years,” said Nathan January, CEO of wanna loan?  

January said he welcomes proposals in the national credit amendment bill, which will give consumers more protection, as it will encourage competitiveness within the industry.

But that’s not to say that there aren’t aspects of the bill that will not adversely affect consumers.

“Should the bill be enacted in its current form, consumers who make use of online lending will no longer enjoy the benefit of automation that this platform provides," he said.

"Essentially what this means is that innovation will be taken back to an era where customers will be required to submit documentation manually.”

There are close to 21 million credit active consumers in South Africa and 85% of them access credit from banks.

He is worried that the proposal to impose more stringent affordability assessments will negatively impact consumers in three ways, namely convenience, user experience and turnaround time.

"This might in fact lead to the unintended consequence of pushing some consumers to informal borrowing, that is loan sharks, thereby exposing them to more risk," said January.

He suggests that this particular proposal be reviewed, or scrapped.

credit  |  money  |  debt
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