focus
Capitec’s Riaan Stassen:
It is also important to
find a way to educate
customers.
Capitec’s Stassen says the Marikana situation showed that more
capacity is needed to enforce the National Credit Act. ‘Had the
situation been policed, you wouldn’t have had a number of guys out
of line,’ he maintains.
Sokutu concurs with this view, adding that ‘timeous and rigorous
enforcement of the act would assist to curb abuse of lending by
those lenders who deliberately break the law by using unlawful
methodologies of lending and collecting money from customers’.
‘There is enforcement,’ argues Advocate Zweli Zakwe, the acting
manager of Investigations and Prosecution at the NCR. ‘We have
conducted 733 investigations since the inception of the NCR and
have also referred a number of matters to the Tribunal during
this time. A total of 57 compliance notices have also been issued.
During the past financial year a total of over R32.5 million has been
refunded to consumers due to enforcement action,’ he says. But even
with enforcement, Advocate Zakwe believes, there will be those
credit providers who contravene the law.
Although the NCR could do with more enforcers to police illegal
credit activities across the country, perhaps stiffer sentences could be
useful in order to discourage providers from contravening the law.
However, Stassen argues that a review of the National Credit
Act should caution against making it harder for the big lenders
to do business, thus giving an opportunity to rogue forces. ‘It is
also important to find a way to educate customers so that they
understand the dynamics, cost and risk and benefits of credit and its
sustainable use,’ he emphasises.
Sokutu maintains that unsecured lending fulfills a real need. ‘For
instance, from research that we conduct, we find that many of our
customers use their loans to improve their housing situation and for
education. This is heartening, as our purpose is to impact peoples’
lives positively through responsible credit,’ he says.
‘What is also evident is that in the unfortunate situation in
Marikana many miners take on a lot of credit, resulting in very
high levels of debt repayments from their wages. Unfortunately
this situation is not only in the mining sector in South Africa. It is
across all sectors in the economy. It is also not unique to low-income
earners. Even high-income earners are generally highly leveraged,
as inflation and a deteriorating macro-economic environment
affects everyone. Obviously the impact is more severe on the lowerincome earners.’
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