Usury Amendment Bill: deliberations and finalisation

Meeting report

TRADE AND INDUSTRY PORTFOLIO COMMITTEE
5 February 2003
USURY AMENDMENT BILL: DELIBERATIONS & FINALISATION

Chairperson:

Usury Amendment Bill [B1-2003]

SUMMARY
The Committee decided that the important issues regarding the performance of the micro-lending industry and the direction in which the Bill and the regulatory framework will evolve would be discussed at a later point in the year. The Bill was adopted by the Committee, with the IFP abstaining from the vote.

MINUTES
The Chair informed Members that the Committee will be engaged in a training workshop on industrial policy on Tuesday 11 February 2003 in G26 and on Wednesday 12 February 2003 in V454.

Usury Amendment Bill
The Chair reminded Members that, during the previous day's discussion, this Committee raised concern with some of the broader issues of concern regarding the micro-lending industry in South Africa. These include the fact that its conduct is predatory in nature and it fails to protect the most financially vulnerable sector of society. Members also agreed that some of these broader issues would have to be addressed later in the year, such as indebtedness, the provision of finance for development. There was consensus that the Bill is a small step in addressing the larger problems in the industry.

Both Prof B Turok (ANC) and Mr S Rasmeni (ANC) agreed with the Bill.

Mr H Bekker (IFP) informed Members that he has not been given a mandate from his party to vote for or against the Bill, but he personally believed that every step taken to "clean up" must be supported. All political parties would agree that any piece of legislation engaged in cannot just create red tape, but has to be able to be administered properly. The IFP would abstain from voting on this Bill, but supported the need for the legislation.

A Member (DP) stated that he has not been part of the discussions on the Bill, and would thus not be supporting the need for the legislation.

Ms M Ntuli (ANC) contended that all Members agree that the legislation seeks to assist the situation by increasing the number of inspectors, but further steps have to be taken with regard to the whole of the Usury Act and the issues raised during the previous day's discussion. Of particular importance here are the problems posed by interest rate charges and the fact that 80% of all micro-lenders are controlled by large commercial banks. Solutions have to be found to these matters so that the South African people can be helped, because if the current situation is allowed to continue, people will become increasingly impoverished.

The Chair agreed and stated that the following matters would be considered in greater detail at a later date: performance of the micro-lending industry, and the direction in which the Bill and the regulatory framework will evolve.

The Chair read the Motion of Desirability and noted that all parties, apart from the Democratic Party, agreed to it.

Clauses 1-5
The Chair noted that no objections were raised to these clauses.

The Chair read the Committee Report on the Bill, and noted that the Committee has agreed to the Bill without amendments. The IFP abstained from voting.

There were no further questions or comments and the meeting was adjourned.