New credit bill to bring relief to over-indebted consumers

A bill which will provide relief to over-indebted South Africans was adopted by Parliament’s trade and industry committee on Wednesday.

The National Credit Amendment Bill seeks to address the plight of the poor and low-income workers who are over-indebted, chairperson of the committee Joanmariae Fubbs said in a statement issued on Friday.

“This bill will strengthen the National Credit Amendment Act which enabled South Africa to withstand the worst effects of the global financial meltdown in 2008,” said Fubbs.

The bill encourages and enforces responsible lending and borrowing and will provide measures to deal with the debt of those earning R7 500 or less.

Other provisions include empowering magistrates to deal with illegal lenders. 

• READ: Nearly half of SA's debt from top creditors 'appears reckless'

The bill distinguishes between secured and unsecured credit. “Essentially this bill addresses a critical gap in the current legislation and that is to provide urgent debt relief to people who are not currently covered by the insolvency systems, which include sequestration or administration.

“Currently debt counsellors do not provide a service for people earning less than or equal to R7 500 as this is not ‘cost-effective’”, the statement read.

Fubbs said that debt will only be extinguished for those seeking relief after all other measures have been exhausted.

The bill has been submitted to the National Assembly for consideration and will be debated on Wednesday September 12, 2018.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER