Gov is drafting credit affordability guidelines

The Department of Trade and Industry (DTI), through the National Credit Regulator (NCR), is drafting affordability assessment guidelines to prescribe to consumers and credit providers how they should assess financial ability to access credit.

This was unveiled by Andisa Potwana, a director in the Department of Trade and Industry (DTI), who was speaking in Witbank, Mpumalanga. His address was part of the public consultation and engagement with stakeholders at Witbank, Mpumalanga on the Removal of Adverse Credit Information.

Potwana said government is looking at a model that will remove the credit burden on consumers and assist them to be active in contributing to the economic growth of the country, said Andisa Potwana, a director in the Department of Trade and Industry (DTI).

Potwana was speaking during the public consultation and engagement with stakeholders at Witbank, Mpumalanga on the Removal of Adverse Credit Information.

The DTI said the Witbank session was the seventh of the sessions held in the different provinces to mobilise for public input into Notice 966 in the Government Gazette No. 36889 published on 30 September 2013. The other sessions will take place in Mangaung and Witbank.

The DTI added that purpose of the consultation sessions is to solicit comments and inputs from consumers and stakeholders on the removal of such adverse credit information from the profiles of those consumers who will qualify in terms of the proposals contained in the Gazette.

Potwana said the aim of credit amnesty is to remove barriers of credit and assist those consumers who can afford credit to access credit.

“This will also remove barriers to employment and stimulate economic growth among others. The DTI has therefore conducted a study to determine the scope of data removal. We have consulted with relevant stakeholders and also conducted research on discretionary income,” added Potwana.

Potwana explained that the department was also looking at a model where all adverse information listings irrespective of value and irrespective of non-payment can be removed also at the removal of all paid up adverse information listings on an ongoing basis and the removal of all paid up judgments on an ongoing basis.

Professor Michelle Kelly-Louw from Unisa said credit amnesty should not be broad but that there should be guidelines to deal with consumers that have been blacklisted.

Earlier the DTI hosted public consultation in Johannesburg stakeholders endorsed the proposed move by government. Ms Magauta Mphahlele of National Debt Mediation Association said her organisation supports the model as long as it is done responsibly.

“We support this because most people that we deal with have found themselves in credit bureaus not because of their own doing. We are saying the proposal should not encourage bad credit behaviour and that as soon as bad it is detected, the department should come up with measures of how to deal with it,” she said.

Mphahlele proposed that the process should be called debt rehabilitation rather than amnesty as it seeks to rehabilitate consumers to be active in the economy.

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