Thank you very much, Speaker. How on earth can I compete with a speech like that? [Laughter.] There is absolutely no way. Hon Fubbs, it's very unfair of you to present such a speech and then I have to compete with that. It's just not possible. [Laughter.]
Speaker, the industry sector for smaller loans and credit transactions emerged over a long period; and it gave opportunities mainly to individuals and smaller businesses to access regular and emergency credit, predominantly as unsecured loans and credit transactions.
This was a very important development, as it gave many individuals access to credit who otherwise would not have had that access.
Although some unsecured micro loans and credit transactions have been controlled by legislation and regulations, it became apparent that there was a huge increase in personal debt, specially amongst the vulnerable and poor communities. This was due to an increasing number of transactions falling outside the current provisions for which there were legislation and regulations.
The explosion of easy, unsecured credit - often extended unscrupulously and without proper checks - has left many South Africans owing more than they can afford to repay.
According to the National Credit Regulator, NCR, more than nine million South Africans have more debt than they can afford to service on a monthly basis; and more than 16 million South Africans have an impaired credit account, which means that they have fallen behind on their monthly payments or have stopped paying.
Many poor South Africans have been exploited by credit providers, reckless lenders and loan sharks who charge exorbitant interest and handling fees, as well as adding on premiums for credit insurance, regardless of the consumer's risk profile and despite the loans being for small amounts.
Some credit providers still illegally confiscate customers' property, force them to hand over their automated teller machine, ATM, and SA Social Security Agency, Sassa, cards and even force customers to sign voluntary garnishee orders.
Access to credit, both secured and unsecured, is a necessary ingredient in any growing economy. In the South African context, government has a responsibility to ensure that consumers are protected against exploitation.
Dit het vir die komitee duidelik geword dat ondersoek ingestel moes word na slaggate wat in die wetgewing gelaat was, nie met die doel om verbruikers te beperk en om aan hulle voor te skryf hoe, waar en wanneer hulle van krediettransaksies gebruik mag maak nie, maar om 'n verpligting op die bedryf te plaas om aan sekere beginsels en regulasies te voldoen wat tot 'n groot mate reeds binne die formele deel van die kredietbedryf toegepas word.
Alhoewel die oop geleenthede tot lenings en krediettransaksies vir alle verbruikers gesteun moet word, is dit die regering se verpligting om te verseker dat daar nie onverantwoordelik gehandel word deur kwesbare en arm gemeenskappe uit te buit nie.
Hierdie voorgestelde stukke wetgewing het ten doel om te verseker dat veral mikro-uitleners en kredietverskaffers verantwoordelik en aanspreeklik gehou word vir onbillike en onregverdige krediettransaksies, waardeur voldoening aan die wetgewing en regulatoriese vereistes baie meer verpligtend gemaak sal word met baie ernstige gevolge indien dit in gebreke sou bly. Die komitee het hierdie netelige kwessie ondersoek, openbare onderhoude gehou en tot laat in die nag gedebatteer oor die inhoud van die voorgestelde wysigings.
Ek moet die voorsitter komplimenteer want ek het dit nooit ervaar dat politieke belange en ideologie voorrang geniet het nie. Dit was deurlopend om die beste belange van die verbruikers te prioritiseer terwyl die bedryfsektor ook nie lamgel moes word nie.
Indien daar onbedoelde en onbeplande gevolge is wat dalk negatief op beide verbruikers en die industrie-rolspelers mag impak waarvoor ons nie voorsien het nie, versoek ons dat dit hanteer moet word sodra dit opkom.
Die voorgestelde wetswysigings gee ruimte vir regulasies wat die operasionele deel van die wetgewing moet help om effektief te funksioneer. Ons versoek die Minister om sensitief te wees wanneer die regulasies uitgevaardig word, spesifiek om te verhoed dat die bedryf onbedoelde skade ly.
Gelukkig is daar tydens die komiteebesprekings ooreengekom dat die voorgestelde regulasies aan die komitee voorgel moet word, om te verseker dat sulke uitdagings hanteer en bestuur word in lyn met die bedoeling van die oorwegings. (Translation of Afrikaans paragraphs follows.)
[It has become clear to the committee that loopholes left in the legislation should be investigated, not with the intention to limit consumers and to prescribe to them how, where and when they might make use of credit transactions, but to place responsibility upon the industry to comply with certain principles and regulations which, to a great extent, are already being implemented within the formal sector of the credit industry.
Although open opportunities to loans and credit transactions for all consumers should be supported, it is the government's responsibility to ensure that the matter is not dealt with in an irresponsible manner by exploiting vulnerable and poor communities.
These proposed pieces of legislation aim to ensure that micro lenders and credit providers in particular are held responsible and accountable for unfair and unjustified credit transactions, whereby compliance with the legislation and regulatory requirements will be made more compulsory, with very serious consequencess if such compliance is lacking. The committee investigated this contentious matter, conducted interviews and debated about the content of the proposed amendments late into the night.
I must congratulate the chairperson, because I never experienced that precedence was given to political interests and ideologies. It was a case of consistently prioritising the best interests of consumers while at the same time not paralysing the industry sector.
If there are unintended and unplanned consequences that might impact negatively on consumers and industry role-players for which no provision was made, we request that they be dealt with as soon as they arise.
The proposed amendments to the Act leave room for regulations that should be of assistance in making the operational part of the legislation function effectively. We request the Minister to be sensitive when regulations are promulgated, specifically to prevent the industry from suffering unintended damage.
Fortunately it was agreed during the committee discussions that the proposed regulations should be submitted to the committee to ensure that such challenges are dealt with and managed in line with the intention of the considerations.]
The objectives of these amendments include the empowerment of the NCR and its chief executive officer, inclusive of all the relevant responsibilities and accountabilities. This is to ensure that the entire industry - including the until now unregulated, unregistered and often illegal micro lenders and credit providers - complies with the same principles and requirements when dealing with consumers and their right to protection from exploitation by unscrupulous loan sharks and credit providers.
It will also arrange for the organisation and operation of the national consumer tribunal in support of the National Credit Act's objectives. Other important principles supported in the proposed amendments include the following.
First, provision is made for the removal of the board from the governance structure of the NCR. This implies that a noneffective burden has been removed, while all the other essential governance, accountability and oversight structures remain in place.
Second, provision is made for the registration and voluntary cancellation of all payment distribution agents, so that no-one can operate informally, unscrupulously or illegally. This will give some assurance to consumers under debt review and debt rearrangement that they will not be exploited.
Third, it will tighten measures relating to debt counsellors and the conduct of their practices. This will ensure compliance by all role-players and stakeholders in the best interests of consumers and the industry.
The fourth principle ensures the removal of adverse credit information once the consumer, under a debt review and debt rearrangement, has fulfilled his obligations or has been rehabilitated under those agreements, except for mortgage agreements, under the debt review process.
Fifth, the primary home is protected when distressed debt must be evaluated and rearranged under a debt review process.
Sixth, there are affordability assessment regulations to address the problem of irresponsible and nonjustified granting of credit. Lenders and credit providers are now obliged to consider the affordability of debt for the consumer. Seventh, the registration of any person or party, including micro lenders and so-called loan sharks who offer credit, is prescribed. Entry levels will be lowered via regulations to ensure that all lenders and credit providers are included and are registered inclusive of all the relevant compliance requirements.
Eighth, there may be no termination of a credit agreement when the dispute is before a court or during debt counselling or mediation. This will allow for a process of proper consideration and restructuring, if need be, to assist the consumer to eventually be able to fully settle the distressed debt. The intention is not to put the industry at risk or for them to forfeit on collections in terms of a credit agreement.
The ninth principle pertains to the prevention of the sale of debt, continued collection of payments or reactivation of debt under an agreement to which this Act applies, which debt has been extinguished previously under the Prescription Act.
Tenth, debt counsellors will be obliged to issue rehabilitation certificates once the consumer has complied with the requirements of the rearranged debt agreement.
Eleventh, the Minister will prescribe an industry code to regulate the interaction between the industry stakeholders in offering their services to consumers, consistent with the purpose and principles of this Act; and finally, it also provides for the capping of costs, interest, levies and credit insurance costs via regulations by the Minister in consultation with the Minister of Finance.
We have agreed in the committee that the regulations, as provided for in this Bill, must be brought back to the committee for oversight and inspection.
We urge the Minister to be cautious and not to burden the industry unnecessarily with regulations that might dilute the purpose, intent and merits of the amendments discussed and considered.
Regulations must be in support of improved and responsible opportunities to consumers, specially those from vulnerable and poor communities.
Voorsitter, alhoewel ander wette reeds in plek is waardeur sekere misdrywe ondervang moes word, is die voorgestelde wysigings aan die Nasionale Kredietwet nogtans 'n poging om 'n bedryf te steun waar verbruikers optimaal ondersteun kan word om verantwoordelike en geregverdigde toegang tot krediet en lenings te kry waaruit hulle volle verpligtinge nagekom kan word. Verantwoordelike verbruikersbesteding via kredietooreenkomste kan 'n sterk katalisator vir volhoubare ekonomiese groei en werkskepping wees. [Applous.] (Translation of Afrikaans paragraph follows.)
[Chairperson, although other Acts are already in place that provide for the prevention of certain crimes, the proposed amendments to the National Credit Act are yet another attempt to support an industry where consumers can be supported optimally in order to get responsible and justified access to credit and loans that will enable them to take full responsibility for their obligations. Responsible consumer expenditure via credit agreements can serve as a strong catalyst for sustainable economic growth and job creation. [Applause.]]