Debt

The Portfolio Committee on Trade and Industry expressed concern that reckless lending was continuing despite efforts to address this in the National Credit Amedment Act.

In response to this, the Department of Trade and Industry briefed MPs on new legislative measures that will bring relief to deeply indebted consumers in South Africa. The measures include extending the powers of the National Credit Regulator to conduct proactive investigations and impose administrative fines on perpetrators as well as empowering the Minister to provide debt relief mechanisms through regulations.

The Department advised that there was a need for the NCA to make provision for the introduction of debt relief/forgiveness measures to alleviate household over-indebtedness in difficult economic circumstances. The criteria for this process should be informed by the prevailing economic conditions in the country. The Minister should be given power to prescribe debt relief measures through regulations, and the circumstances to be considered under such regulations may include, but were not limited to, the prevailing economic circumstances in the country or sector, or a section of the community.   

MPs said there needs to be a balance and not foster a culture of not paying debt, with the hope of the debt being written off. The trade and industry committee has set up the subcommittee as a prelude to the possible inclusion of debt relief measures into the National Credit Act, or in a separate bill. It will look at the implications of legislating for debt relief measures and will engage with a range of stakeholders about this.