Relief might be on the way for many over indebted South Africans if the draft National Credit Amendment Bill goes through in its current form.
The bill could give the National Credit Act (NCR) powers to cancel some debt under certain circumstances. This will apply only to individuals earning less than R7,500, who have no readily realisable assets (excluding exempted items), are not subject to debt review and have debt of less than R50,000.
The bill proposes to allow the NCR to do a debt review of affected individuals, make a ruling and then refer the matter to the National Consumer Tribunal.
Consumers will be able apply only once to the NCR for a debt intervention. The NCR will then refer cases to the National Consumer Tribunal, which can rule to provide debt relief. The tribunal can call for reducing interest costs, lowering the monthly installment or declaring the agreement unlawful.
This will be welcomed by many South Africans who are suffering under piles of heady debt. NCR statistics show that about 10-million consumers have impaired credit records which represents about 39% of those who are credit active.
The draft National Credit Amendment Bill forms part of government’s initiative to offer relief to over-indebted consumers. These include the 2014 credit amnesty and flushing out unscrupulous behaviour in the micro finance market.