BizForums
   

FAQ Calendar Search Today's Posts Mark Forums Read
Go Back   BizForums > Africa > Southern Africa
Home Viewpoints and Forecasting Forums UK Ireland South Africa
.  
Southern Africa South Africa specific news feed


Dti puts a cap on reckless lending


Reply
 
Thread Tools Display Modes
Old 07-22-2014, 10:55 AM   #1
newsroom
Administrator
 
newsroom's Avatar
 
Join Date: Jun 2008
Posts: 1,155
newsroom is on a distinguished road
Default Dti puts a cap on reckless lending

The Department of Trade and Industry (dti) will later this month publish regulations to standardise affordability assessment tests in order to curb reckless lending.

“South Africa has seen a worrying increase in levels of over-indebtedness. Factors leading to over-indebtedness include the prevalence of reckless lending caused by, inter alia, marketing of unsolicited loans, provision of pre-approved credit facilities including credit cards and failure on the part of some credit providers to conduct affordability assessments.

“In addition to this, consumers seem not to be entirely honest in providing information that is required by credit providers to conduct proper affordability tests,” said Deputy Director-General of Consumer and Corporate Regulation Division at the dti, Zodwa Ntuli.

The regulations will be published before the end of July for a 30-day period.

She said that while bypassing affordability tests may provide immediate gratification to a person that applies for such credit and the credit provider granting it, the effects are severe, as they may lead to repossession of property and being blacklisted.

Ntuli added that the review of the application of the National Credit Act No. 34 of 2005 (NCA) highlighted serious gaps in the credit market. It was for this reason that on 20 May 2014, President Jacob Zuma signed into law the National Credit Amendment Act No. 19 of 2014 (NCAA) to deal more effectively with reckless lending.

“Section 82 of the NCA has been amended to give the Minister of Trade and Industry the power to make affordability assessment regulations with a view to standardise affordability tests in the industry,” Ntuli explained.

Currently, credit providers determine the models for affordability assessments and investigations by the National Credit Regulator (NCR) have revealed that these are often inconsistently applied.

With affordability assessments regulations becoming binding, there will be more consistency and monitoring will be easier.

“The responsibility on the consumer to disclose fully their financial obligations to the credit provider is very important to affordability assessments. In particular, a person that has the monthly child maintenance obligations must disclose this to the credit provider so that it is taken into account in determining affordability,” she said. – SAnews.gov.za
newsroom is offline   Reply With Quote
Reply

Go Back  BizForums > Africa > Southern Africa

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump


All times are GMT. The time now is 09:44 AM.

Powered by vBulletin®
Copyright ©2000 - 2018, Jelsoft Enterprises Ltd.
© 2008 - 2015 TheBizSense All Rights Reserved