Thank you, hon Chairperson. I agree with the FF Plus that it is a blessing to work for this committee.
The ANC and the progressive people of South Africa, ie the South African rainbow nation, are proceeding to take our country forward to the nation that our icon, and the world's icon, Tata Rolihlahla Nelson Mandela, referred to as an ideal. In his own words he said, and I quote:
I have fought against white domination and I have fought against black domination. I have cherished the ideal of a democratic and free society in which all persons will live together in harmony with equal opportunities. It is an ideal ...
And I repeat, "an ideal" -
... which I hope to live for and achieve. But if needs be, it is an ideal for which I am prepared to die.
The ANC calls on all South Africans to vote right on 7 May 2014, and "right" means to vote ANC, because this is the only way to sustain and intensify the good story we are currently telling.
The good story continues as we amend various Acts of this House to ensure the protection of beneficiaries and to make it difficult for abusers to take advantage of the living standards of our previously disadvantaged people.
Today's debate is about the National Credit Amendment Bill. In this debate I wish to speak about credit as a concept, the different levels of credit and, briefly, its advantages and disadvantages.
More importantly, I want to speak about consumer credit in South Africa and the importance of this amending Bill, if time allows. I also want to talk about the process that has taken place to get us to where we are. [Interjections.] Thanks, we are there.
What is credit? I am saying that credit is an agreement between the borrower on the one hand, and the lender on the other hand, according to which the borrower receives money, goods or services from the lender.
This is done with the view that the borrower will pay back to the lender the principal amount plus interest in a manner, and on dates and times as agreed to by the parties, and provided that the whole process is in line with the relevant legislation. The granting of credit takes place in different forms and depends on different levels.
Firstly, at a global level, countries borrow from each other, from the World Bank or from the International Monetary Fund. It is mainly for the development of those borrowing countries.
Second, at business level, credit is acquired for developmental purposes, ie to start a new business, to sustain an existing business or to expand an existing business.
Third, at the household level, credit may also be acquired for developmental purposes. This developmental credit includes, but is not limited to, educational loans, the development of small businesses and the acquisition, rehabilitation, building and expansion of housing, etc.
Lastly, at the individual level, credit is also acquired for purposes other than development. This includes, but is not limited to, in-store clothing accounts, furniture accounts, money lending, credit cards, etc.
Credit has advantages if well managed. Developmental credit is paramount and it promotes entrepreneurship; assists households; contributes to the growth of the economy; boosts the purchasing power of the borrower; assists in the event of emergencies; and assists in the growth and development of society, for example, education, health and the establishment of small businesses, etc.
If credit is not well managed, it may lead to overindebtedness, which in turn may lead to the ruining of your credit score. Credit can tempt you to spend more money than you have.
Consumers may easily roll over the debt, ie paying and borrowing again and again, which might lead to their having a legacy of debt. Poor management of credit may also lead to defaults, thereby causing you to pay default fees and interest charges, thereby increasing the amount you owe.
Let me return to consumer credit in South Africa. I have just given a picture of credit at different levels and how it comes about.
The national consumer credit market report on credit results tabled in September 2013, reveals that of the approximately 20,29 million active credit consumers in South Africa, 48% have impaired records. For the information of the public, "impaired record" means that the record of a consumer shows he or one of his accounts is classified as either being three or more payments or months in arrears, which has an adverse listing, or reflects a judgment or administration order. That would mean you have an impaired account.
High debt levels resulting from unemployment, partly caused by the global economic slowdown, are a cause for concern and often warrant government intervention.
The adverse impact of overindebtedness must be prevented. Government must intervene in such a manner that it benefits both the consumer, on the one hand, and on the other, the other half of the market, which is the creditors.
The National Credit Amendment Bill is one of the methods of government intervention that we are referring to. The importance of this amending Bill has been outlined by a number of speakers who spoke before me, but it is also included in the long title of the Bill, and I will therefore not speak on it. It has been referred to.
I want to use the remaining time to say that the National Credit Amendment Bill has been with the committee since October 2013. The committee has been grappling with it, and a whole lot of activities have taken place. As a result this particular Bill is ready to come before the House. The Bill was referred to the committee; the department briefed the committee; media statements were released; adverts were published in regional newspapers, and national submissions were made; members were engaged in radio interviews; adverts were placed on parliamentary websites, Facebook and Twitter pages; public hearings were held and people made their comments.
As I speak now from the southernmost corner of Africa, I know that in all the villages of the most northern corner of this country where I come from, they know that we are dealing here with this Bill. In the far northern part, which is Limpopo, the people in those villages know that we are dealing here with this Bill. So I do not understand where this idea comes from that we are rushing, rushing.
I am sorry to have to say to those who say we are rushing: please accept that this process must go through. It is a very good story. [Applause.]