'Debt intervention' National Credit Amendment Bill: DTI Socio Economic Impact Assessment terms of reference; outstanding decisions

Meeting report

National Credit Amendment Bill: Socio-Economic Impact Assessment Study (SEIAS)
Dr Evelyn Masotja, DTI Deputy Director-General: Consumer and Corporate Regulation, informed the Committee that the study will be outsourced by the Department of Trade and Industry to identify the implications of the Bill going forward. The process is meant to support the Bill and DTI wants to ensure that the work is thoroughly done with evidence.

This will be done as part of the parliamentary process. The need for a SEIAS was raised at the public hearings as well as by Treasury and the Department of Justice. The terms of reference were made in March but since then there has been a lot of policy discussion and decisions taken to change aspects of the Bill. DTI will send the revised Terms of Reference (ToR) to the Committee in the next week.

Ms E Ntlangwini (EFF) interjected that the terms of reference should wait for the updated version of the Bill.  

The Chairperson added the correct version of the Bill is dated 16 May.

Dr Masotja said that DTI will invite bids and comments for the SEIAS, and preliminary work has already been done by the NCR and NCT about their resource requirements. DTI also acknowledged the research done by the organisation, 80/20. The study will be conducted over a period of 16 weeks.

The objectives of the SEIAS are:
- Assess the socio economic impact of the debt intervention on targeted consumers and credit providers.
- Assess risks associated with the implementation of debt intervention and mitigation measures for these.
- Advise on some of the implementation mechanisms for debt intervention
- Develop recommendations to strengthen debt intervention and assess whether existing debt relief measures could be enhanced for the benefit of low income consumers.

The areas of focus for the scope of the SEIAS will be:
- Total debt, consumer credit standings, extent of consumer over-indebtedness by race, gender, employment type, income level, geographical location, credit provider and credit type/use
- Existing debt relief measures implemented by credit providers and extent to which they are implemented
- Impact of debt intervention on credit providers, differentiating impact on micro lenders from macro lenders
- Impact of debt intervention on the stability of the banking and retail sectors
- Impact of debt intervention on contribution of credit industry as a percentage of GDP and knock-on effect on the economy
- Impact of debt intervention on targeted consumers in reducing over-indebtedness, future access to credit, improved financial literacy
- Impact of debt intervention on debt collectors, payment distribution agents, lawyers, South African Reserve Bank and the Financial Services Board.
- Assess risks associated with implementation of debt intervention and the mitigation measures thereof.
- Determine the resource requirements and cost implications for implementation of debt intervention for the National Credit Regulator (NCR), National Consumer Tribunal (NCT) and credit bureaus.

Discussion
Ms E Ntlangwini (EFF) asked if DTI lacked the capacity to conduct the SEIAS itself. Secondly, DTI was part of the overseas study tour; therefore, perhaps DTI should put together some work on the lessons learnt during that tour, and determine if the lessons learnt may be incorporated into the Bill. The terms of reference confirm that the Bill does not seek to put any credit provider out of business or the credit market under strain. It is not true that the Bill seeks to do this. The Committee wants to ensure that regulations in the credit market are strengthened so that ordinary South Africans may improve their livelihood.

Mr G Cachalia (DA) said the scope of the study covers the pertinent points. In the previous meeting he mentioned the potential conflict between debt counsellors and the NCR role in the debt intervention measure. He suggested this be included in the scope of the study. He would like to see its impact.

Ms P Mantashe (ANC) agreed with the proposal on the DTI lessons learnt from the UK study tour. She was concerned about the time frame DTI set to conduct the SEIAS because the assessment must be done countrywide. She had reason to believe that the SEIAS would target only urban areas, but the SEIAS must include the rural areas – that is a critical part of the debt intervention measure. She asked DTI to confirm if 16 weeks would be sufficient.

Mr B Radebe (ANC) agreed that the time frame might not enable a nationwide study. In rural areas, pensioners roll over debt month-in-month-out. DTI should not limit itself to 16 weeks. He suggested the set time frame should rather be set as a benchmark.

Adv A Alberts (FF+) agreed about the time frame. DTI must also look at the function of the debt counsellors. He did not see the functionality of the debt counsellors being investigated, and they are supposed to play a role. The Committee must finalise the Bill first in the Committee before going ahead with the SEIAS so that the final version of the Bill is used.

The Chairperson echoed the concern about the time frame. She wondered if the Committee should adopt the Bill and then give it to DTI to conduct the SEIAS.

Mr D Macpherson (DA) said it is important that the ToR breaks down the different categories of credit providers because there is a broad spectrum of them. In determining the NCR and the NCT "resource requirements and cost implications", it is being assumed that the NCR and the NCT are going to regulate and manage the debt intervention process. He did not think a definitive view had been taken on whether that is the correct approach to take. Determining resources is one thing, but another question is whether they are the best organisations to manage the process.

Dr Masotja acknowledged the comments on the SEIAS ToR as well as the impact on debt counsellors. The comments are aimed at improving the terms of reference. DTI will also look at the time frame as well as the nationwide spread – these were all noted. The credit industry role players will also be broken down as suggested. There is research capacity in DTI but given the magnitude of the SEIAS, DTI would rather utilise an independent research body for credibility and independence.

Ms Mantashe said it was unfortunate that the UK Study Tour Report has not yet been tabled. The tour revealed that credit providers in England have a role to play in implementing debt relief measures. Hopefully, DTI and the Committee can look into how we can put it to credit providers that a levy be offered so that the Bill is a success. At which point is the Committee going to engage them about the levy.

Ms Ntlangwini said that during the study tour overseas, she realised that UK credit providers took some form of responsibility in their role towards over-indebtedness. On outsourcing the SEIAS, she said that 80/20 should not get the contract considering that it has already done research for the Bill. There might be conflict in some of the information.

Mr Macpherson said that it would be problematic for the Committee to start determining who can or cannot do the work. There is a clear outline of the advertisement process on page 10 and bids will be invited.

Dr Masotja replied that the process will be competitive, and DTI has not earmarked any service provider. All interested service providers will be invited to bid.

The Chairperson advised that DTI should be a bit cautious about its time frames. The Committee had asked Treasury to provide its own Impact Assessment Study, and Members were taken aback by the outcome of the Study, because it revealed the seriousness of the issue. The Committee is not here to make a comprehensive and significant amendment of the Credit Act but to address vulnerable South Africans in debt. For some reason there was insufficient legislation to prevent the negative impact them. DTI should be looking at six to nine months to conduct the SEIAS.

Mr Radebe said that the SEIAS must be on the implementation of the Bill by the Department. Parliament has a very short period this year due to the upcoming elections. Thus, the Committee cannot afford to delay the process any longer because people out there need this legislation. The SEIAS must not hamper Parliament's progress on the Bill.

Mr Macpherson said he was interested in understanding what Mr Radebe meant by saying the SEIAS should not delay progress. The SEIAS answers very important questions about how the intervention will impact the industry and communities. Once things are written down, there is a real reluctance to start changing them because of the work that has been done up to that point. The Committee needs to understand how it intends to proceed after the SEIAS has been completed. The Committee had agreed that the Bill needs evidence that is scientific and research led – this was the agreement at the initial stages of the Bill. However, now it seems that stance has been tossed aside. He hoped and cautioned the Committee that it takes a different approach in waiting for this study to inform the Committee on how to tackle the legislation and finish it to ensure that it in fact does what it was intended before it becomes an Act.

On time constraints, Ms Ntlangwini asked what the best solution was to ensure that the process did not hold up the initial work because the process has come a long way. She asked if it was possible for DTI to make use of the 80/20 research findings that Treasury commissioned. Surely, DTI can make use that information. This will assist in avoiding to start the process from scratch.

The Chairperson said that the Committee has always worked very closely with Treasury, at first it was not happy about the debt intervention measure. However, when DTI began to see what the Committee intended, Treasury began to see its importance. Then Treasury agreed to do the SEIAS, and it is from that SEIAS that the Committee started working with an understanding of the impact of the Bill. She persuaded Members to refresh their minds about the initial intention of the Bill, and she noted the time frame for the Bill has already been set. She asked Adv van der Merwe to give the Committee a technical clarification of where the Committee is and how the current impact assessment of Treasury fits into this.

Adv van der Merwe confirmed that the SEIAS process is a Cabinet decision; it is not applicable to a Bill introduced by a Committee or Private Member. It is not to say that the impact assessment is not a good thing for a committee and private member bill. The specific socio economic assessment and the one DTI presented today will go through DPME – it is an executive process and it is not a requirement for a Committee Bill. The first couple of drafts of the Bill – although the content is very similar to the content currently before the Committee, the structure of the Bill and the process was very different. It allowed for a broad interpretation of what that impact would be and who it would affect – there were concerns about that. One of the big things is that the first couple of drafts did not require over-indebtedness of the applicant. The Committee understood initially that everyone earning up to R7 500 must be over-indebted.

When Treasury presented its impact assessment report, the structure of the Bill changed radically. The Bill initially had one process, that process is now broken into two with debt review and extinguishment, the criteria are now stricter and more limited. The Committee has in fact done an impact assessment through Treasury and it was taken on board by the Committee. She was not implying that the impact assessment study by DTI would not be necessary, but from a legal point of view, the Committee can proceed at this point with the Bill. The only outstanding matter are the policy questions that still need to be answered and then the Bill can go for certification as being constitutional. She requested that the Bill must be referred to Senior Counsel for an opinion before she can certify the Bill. The Committee has actually done more than is required; hence, there is now Draft 6 due to the many changes based on information taken into account.

Mr Macpherson said that the DA would not be able to make a final decision on the Bill until it has the DTI SEIAS, so that we do not make policy judgements based on feelings instead of facts.

The Chairperson asked if he would describe the 80/20 Study Report as a "feeling" document.

Mr Macpherson replied that the Chairperson misconstrued his position. There are issues that were not dealt in the 80/20 Report that would be dealt with in the SEAIS Report.

Mr Radebe said that DTI should continue with the SEIAS because when you move into the inner cities and rural areas, people are over-indebted and that information is critical. Sufficient work had been done, and it is going to help DTI when it starts implementing the Bill, and ensure that it is aware of what is happening on the ground so that after 24 months it can assess the impact of the Bill. However, the SEIAS must not hold the Committee back.

Ms Ntlangwini welcomed the suggestion that a Senior Counsel legal opinion on the Bill should be sought. She was not scared to advance her party’s support of the Bill because it is a critical and necessary measure.

The Chairperson informed Members that the Committee Content Advisor, Ms Margot Sheldon, will put together the Overseas Study Tour Report and it will be submitted on 21 or 22 May.

Dr Masotja asked for clarity on whether DTI should put its SEIAS on hold considering that there was already a Study completed by Treasury plus there were extensive public comments that were considered.

The Chairperson replied that the SEIAS would take long; it is definitely not going to be three months. If DTI wants to be ready when the Act comes out, it must have already done this work. This would assist DTI with the implementation process of the Bill, as well as the NCR. DTI must focus not only on the implementation but the impact as well to ensure it understands how the challenges will be addressed. She did not see the substance of the Bill changing much but perhaps the detail.

Ms Ntlangwini said she would have thought that DTI would continue with the SEIAS, but it must come back to inform the Committee on a new time frame. In the meantime, the Committee should ensure that it does not lose out on the processes it must follow.

Adv Alberts said that he did not think DTI must narrow the study. The more information presented on impact to add to the existing information, the better for the Committee to make informed decisions which will help to ensure that the Bill as enacted is not challenged in court.

Mr Macpherson said that SEIAS focus should be both on impact and implementation.

Ms Mantashe agreed with Mr Macpherson and that all information is welcomed.

'Debt intervention' National Credit Amendment Bill: outstanding decisions
Adv Charmaine van der Merwe worked through the Matrix of Outstanding Matters. On the last page of the matrix, she would add matters raised from the study tour that Members would like to include in Draft 6.

Preamble and Clause 1
The Preamble outlines the measures that the Bill will undertake through debt intervention. One of the criticisms from the public was that it was not clear why there is a gap. Including it in the Preamble explains where the Committee is coming from, it is not that the targeted group do not want debt counsellors; it is actually the other way round. Debt counsellors do not want to assist these clients because they work at a loss, hence the phrase “economically viable”. She asked if it should be kept as is or made shorter.

Ms Mantashe said there was a reason to propose it in the first place, but if there is a shorter version that is explicit, that version can be incorporated.

The Chairperson said the shorter version was not explicit enough.

Mr Macpherson said the point is that these people are not economically viable for a debt counsellor and the suggested phrase is not as clear as the NCR suggestion (“…current debt measures are inadequate for these consumers”).

The Chairperson said that it appears that Members agree to keep the current version.

Adv van der Merwe said there are specific limits in respect of income of R7 500 and total unsecured debt, R50 000. The question was whether these two amounts would still be applicable in ten years’ time. This question has come up because initially the debt intervention measure was intended as a once-off measure. We provided for all agreements up to a certain date and any agreements after that date would not qualify. There was an automatic cut-off date, the debt intervention would have lasted for that period of time and after those agreements were taken care of, the measure would have ended. There were calls for the measure to be long-term because people would need this measure. Criticism about the date in the Bill also arose as by the time the enacted Bill is operational, two years would have passed as systems would need to be put in place for the industry, and that takes time. So the November 2017 date looked like a thumb-suck. The decision was that there are almost two aspects to the process, the process that looks like debt review was separated from the process of extinguishing debt. The debt review process is a long-term process – there will be two types of debt review; there will be the normal one conducted by debt counsellors and the process undertaken by the NCR for the targeted group of consumers that cannot afford debt counsellors. Now that the debt review process will be ongoing, questions about the longevity of the stipulated amounts came up. The proposal is that the Minister should be given the power to review these amounts from time to time. However, the Committee needs to keep in mind that the extinguishing of the debt is not a long term process. Hence, it is given a sunset clause. The referral to the extinguishing of debt is only for two years from the commencement of the Act.

She cautioned that if the Committee agrees that the Minister can change the amounts from time to time, we should state that it applies only to the debt review process not the extinguishing process. For the short term part of the measure (extinguishing) those amounts remain as they are; for the long term part of the measure (debt review), they can be adjusted by the Minister from time to time.

DTI agreed with her, but another comment surfaced that perhaps there should not be an amount at all. However, she cautioned that that will open up uncertainty.

Mr Macpherson said he was concerned about giving the Minister the ability to prescribe. Any amount more than R7 500 would take people away from debt counsellors and that may threaten the industry that seeks to rehabilitate people to stay in the credit market. He suggested that this can be done by Parliament, because this is a Committee Bill.

Mr Radebe said the Minister must have authority to prescribe the amounts, and the Minister would consult the proper processes and statistics before coming to any decision. Perhaps, the Minister can be given the powers to prescribe but in concurrence with Parliament.

Adv Alberts said that at the very least the Minister must exercise his powers with the concurrence of Parliament.

Ms Mantashe said she was uncertain why there was fear to give the Minister Powers to prescribe; she agreed with Mr Alberts that it can be done with the concurrence with Parliament.

Mr Esterhuizen said that he agreed with Mr Macpherson that it must be left at Parliament’s discretion.

The Chairperson indicated that the majority of the Members agreed to give the Minister the power to prescribe in concurrence with Parliament.

Mr Macpherson said that it is incredibly vague to say “from time to time” and what those prescribed amounts could be. The Committee should remain in control of the Bill and how it proceeds when it is enacted. The Committee must stop sourcing responsibility to the Executive. If for whatever reason the amounts should change, it must be Parliament that must effect that change. It should not be in concurrence with Parliament because who knows what the Minister’s intentions will be.

Mr Radebe said that the Executive and not Parliament is going to be the implementer of the legislation. The SEIAS will be able to inform the Committee how often this is reviewed. He indicated Parliament will still have control because if it does not concur with the Minister, it cannot be changed. Therefore, it must remain as is.

Adv van der Merwe said there was a problem because the Bill cannot state “in concurrence with Parliament” because they are two branches of government. If there is no consensus, there will be a stalemate. We can keep it as “amount prescribed from time to time”, and then we can add a clause in the Regulations that “when the Minister prescribes he can only do so after receiving permission from the National Assembly”. We can also provide some guidelines on how the Minister arrives at the prescribed amount. This can be done, and she will work on it and add something to the Regulations.
 
Clause 3
Adv van der Merwe said there is a drafting technicality where she did not include the measure that will be prescribed by the Minister. DTI had also agreed.

The Committee was comfortable with the proposal.

Clause 9
There was a technicality on page 9 of the Bill at the insertion of section 71A(3A) which deals with the automatic removal of information from the credit bureaus but the order for rehabilitation was left out. This must be added.

DTI has suggested that the credit bureaus must remove the listing within 7 business days rather than 14 business days

Adv Alberts said that he did not see a reason why it cannot be 7 days if the credit bureaus can deliver the function within 7 days.

The Committee agreed to 7 working days.

Section 71A(3C)
Adv van der Merwe said what normally happens is that when the credit provider submits information to the credit bureau and there is a dispute on the accuracy of the information, that dispute is taken to the Regulator. Now it is the Regulator that is submitting the information, so you cannot lodge a complaint with the Regulator when it also receives the information.

She proposed that it should be the Minister that looks at the dispute because it affects the entity that reports to the Minister and the consumer. The Minister can delegate this function to an independent party. The Tribunal said this might not be practical; there should be an independent party to adjudicate. Thus, it may be directed to the Tribunal. The Regulator says a complaint can be lodged to the NCR and be reviewed by the Tribunal. It is either reported to the Minister; or via direct application to the Tribunal; or lodge a complaint to the Regulator which can be reviewed by the Tribunal; and the last one may be an informal step where the person can to go the Regulator and inform it that it has filed wrong information. She suggested that the easiest straightforward options would be the Minister or the Tribunal.

Adv Alberts said the question is who can actually deal with a great load of work if there should be a lot of applications. He did not think that the Tribunal was capacitated to deal with this but if there is reassurance that the Tribunal would be able to handle it, he would suggest that the Tribunal takes on the function.

Mr Macpherson said that he would not support the function be given to the Minister or the Department, the Minister has better things to do. So the question is if the Tribunal is capacitated to deal with this.

Mr Radebe said it would be difficult for the Minister, but the Tribunal must indicate if it is capacitated in terms of resources to deal with the disputes. If not, it would need to outline what is required.

The Chairperson asked if the Regulator did not already deal with complaints and disputes.

Ms Nomsa Motshegare, National Credit Regulator CEO, responded that currently the Regulator deals with disputes but in this instance the Regulator would be party to a dispute. Thus, the NCR would not be the right place to deal with such disputes. She suggested that the Minister should also not deal with the disputes; they should go straight to the Tribunal but not through the Credit Ombud because where the Credit Ombud cannot deal with the dispute, it normally refers them to the Regulator.

Prof Joseph Maseko, National Consumer Tribunal Chairman, said the Tribunal exists only to deal with dispute between parties, and it is administrative court and only handles evidence between parties at dispute. If Parliament decides to outsource it to another party, then it is Parliament’s prerogative but the Tribunal deals with disputes.

The Committee agreed that it should be the Tribunal.

Clause 10
Section 82A(2)
This relates to the debt counsellor reporting a possible credit reckless agreement, but debt counsellors indicated through the public hearings that they would struggle to get this information from credit providers. Members had asked if a sanction should be imposed when credit providers failed to submit information.

Mr Radebe said the Committee raised this last week and said that when the consumer provides wrong or misleading information to the credit provider there is a punishment of imprisonment. He suggested that imprisonment should also be included for credit providers – there must be a balance.

Ms Mantashe agreed.

Adv van der Merwe said she can insert a clause that imposes imprisonment on the credit provider but the Committee would have advertise the clause because it is new and the public have not been consulted on it.

Mr Radebe said that this is a Committee Bill and it is important but also the time frame is important. The issue of the offences is very serious but he suggested that it can be parked for now – the Committee does not have to take a decision on it now, but he emphasized its importance.

Mr Alberts said the parliamentary law advisor may also advise on the policy basis to create a new offence.

Adv van der Merwe replied that there is no strict list of things that can be looked at to create a crime. The question is if it is something that is serious, to an extent that you cannot enforce compliance in any other way. For instance, unregistered credit providers cannot be arrested on the basis of being unregistered, fines are imposed but now the Bill makes that a crime. Perhaps at this stage we can see how the administrative fine goes, and then see if the fine works or not in certain instances.

The Chairperson asked for how long the call for comment on the clause will need to be advertised.

Adv van der Merwe replied that it can be done for two weeks and the comments can then be considered.

Mr Radebe said that two weeks would not have an adverse impact on the progress of the Bill, and the Committee does not necessarily have to conduct public hearings again.

Mr Macpherson said he was struggling to understand where this fits in with the actual clause on debt counsellors considering reckless credit agreements. How does this fit into the clause?

The Chairperson said the Committee cannot criminalise anything unless it has advertised and called for comment. If we are going to apply the principle to this clause, it must be applied in other cases as well.

The matter was flagged for further discussion.

On the same clause, the question arose whether five business days was sufficient. DTI proposed seven to ten business days. The Committee will decide which option it supports.

Section 82A
Adv van der Merwe asked the Committee to confirm the policy issue in this provision where the Regulator also adjudicates on matters. There is a constitutional concern if the Regulator is given the right to suspend credit agreements. Due to this, she did not include this in the Bill. The Tribunal, Regulator and DTI also confirmed that this was a concern. DTI has indicated that the current review process has some kind of mediation and to rather make use of that instead of the suspension because one does not want the consumer to wait too long for the suspension of credit agreements. From the Committee support team believes this function will have to be given to the Tribunal. The concern about the delays is noted but she proposed that the Regulator and the Tribunal can work together and come up with a report on where the delays are, if the delay is within DTI then it can be fixed, but if it is outside then the Committee will have to look at other measures.

Ms Motshegare replied that a report on this was submitted two or three years ago. Most of the delays happen in the appeals process where it is beyond the NCR’s control.

Prof Maseko replied that the main delays that are inevitable are those where points of law are raised.

The Chairperson said from time to time there are challenges with appeals, so for how long does the Tribunal sit with appeals?

Prof Maseko replied that the turnaround times are very fixed for efficiency purposes. It is in extreme cases where a person fails to deliver because of sickness or on doctor’s orders that prohibits them from exercising their responsibility.

Adv van der Merwe asked if the Committee agreed to leave the suspension function to the Tribunal.

Prof Maseko said the Tribunal was sensitive to the delays the Committee was concerned about after past discussions about this. They had suggested that there could be a halfway station for NCR to expedite suspensions. If they propose it to the credit provider and the credit provider has no objection, they might just do it through a compliance notice, because the NCR is able to issue compliance notices. Many of these things can be quashed at that level without it having to be adjudicated. He emphasized that he had raised this before. When matters get adjudicated, they begin to take much longer.

Ms Motshegare confirmed that the Regulator does have the power to issue compliance notices.

Clause 13
Section 86A(1)
The question about whether the R50 000 amount will still be the same in ten years’ to come was already discussed by the Committee.

Section 86A(5)
This refers to when applicant approaches the Regulator, the Regulator must counsel the applicant on financial literacy and capability and provide access to such training. Members suggested that the training must be provided at the time of application but she had worded it differently from Members’ instruction. She did not say that they must give the “training” but rather “access to training” – it is not that the Minister must provide the training programmes but rather facilitate it. Treasury is already working on this programme and it arises from the Financial Sector Regulation Act that has come in, that has resulted in training facilities that have been developed outside DTI. This does not mean the applicant will undergo the training, but it will only come in as a requirement when there is a suspension or extinguishment of the credit agreements. She suggested that applicants must not be forced to undergo training because it implies that the Tribunal can hear the application or the Regulator can start negotiating with the credit provider only once the applicant has completed training. If the training is once a week for five weeks, this meant already a five week delay in the process before negotiating. It is probably best that it is not compulsory but more on a counselling basis. She asked the Committee to confirm if this was preferred.

The Tribunal did not recommend that the training must be compulsory but DTI says it should be compulsory, otherwise they must be excluded from debt intervention as there will be no change in their behaviour. It is also in line with a longer-term policy view that there will be financial literacy for everyone in the future. The Regulator recommends that at its stage it is a recommendation only and only the Tribunal can impose it as compulsory. She wanted some guidance on at what stage the training should become compulsory.

Mr Radebe emphasized that training was very important because it is not good that people have to go through the process over and over again and it must not be conditional. When it comes to suspension and extinguishing, the training must be compulsory.

Ms Ntlangwini agreed that it must be compulsory at the suspension and extinguishing phase.

Mr Esterhuizen said that it would be impossible to force people to undertake the training. Most people that would apply for the measure do not have time. It must be optional.

Mr Alberts agreed that it is difficult to force training on people who are just trying to survive. However, the training material must be provided so that they can understand how they can change their behaviour.

Mr Radebe said training must not be optional because it focuses on empowerment.

Ms Ntlangwini suggested that perhaps people can be provided with the material at the beginning stage to learn about financial literacy perhaps through pamphlets. Then at the end of the process (suspension and extinguishment), it can be made mandatory.

Adv Alberts said that the Committee is dealing with these problems in a surgical manner. He suggested that financial literacy can be introduced at school level so that learners can learn about its importance. Perhaps, the Committee could speak to the Department of Basic Education on this. This measure seeks to reverse a problem that exists due to lack of knowledge and circumstances.

The Chairperson agreed with this suggestion. This can be factored into the Committee Report as a recommendation. On the first application, is there no way some form of empowerment or training can be offered when they come to apply.

Prof Maseko stated that he had commented on education and financial literacy before. When the NCT says that it must not be compulsory, it is not because it did not want people to be educated. It stemmed from the implement-ability and the lack of such an institution to provide that training. Those that are already established are too expense for people to afford. It would not make sense to send an over-indebted consumer to a training facility that they would have to pay for when they are actually seeking debt relief. He said that the Tribunal recommended to the Committee to consider prescribing an institution which is funded or a fund sits with the NCR that it uses to accredit specific trainers and prescribe the curriculum for them. So when NCT orders someone to undergo training they go to the prescribed training fully funded by the State. This over-indebtedness is like a pandemic, it is not something that can be left in the hands of the individuals anymore.

Ms Mantashe agreed that the Committee must consult with the Department of Basic Education and the NCR is at the core of what the Committee seeks to do. She had previously suggested that credit providers should be required to pay some levy to assist the programme that government is trying to embark on because government cannot do this all by itself.

The Chairperson said that if we are going to talk about extinguishment, the training programmes are made compulsory but taking into consideration the circumstances of the applicant. Extinguishment is such a serious approach.

The meeting was adjourned.