The men (and even more women) in black

Finweek English Edition - - Companies&markets -

MUCH OF THE RE­SEARCH – and cer­tainly the sen­ti­ment – that sparked off the well-cov­ered spat be­tween Na­tional Credit Reg­u­la­tor (NCR) CEO Gabriel Davel and the banks some weeks ago is car­ried in the NCR’s lat­est an­nual re­port. It’s an is­sue that isn’t go­ing away soon. Es­sen­tially, Davel claimed credit providers – and NCR re­search shows those are largely South Africa’s big re­tail banks – are de­lay­ing mag­is­trates’ court hear­ings to get debt-drown­ing con­sumers into debt coun­selling.

Wait for the banks to come back: in ear­lier years this writer can re­call prom­i­nent posters in the win­dows of mi­cro-lenders (then called loan sharks) warn­ing of the dan­gers of debt coun­selling.

But the NCR isn’t just into big bank bash­ing – it seeks out the un­scrupu­lous credit providers. And notes in its an­nual re­port – un­der the head­ing “In­ves­ti­ga­tions and pros­e­cu­tions” – show it has the teeth and en­ergy to ef­fec­tively en­force the Act it’s charged with reg­u­lat­ing.

Dur­ing its fi­nan­cial year, the NCR launched what it called the “Rusten­burg Blitzkrieg”. That in­volved a com­bined ex­er­cise with the SA Po­lice Ser­vice and the pro­vin­cial con­sumer af­fairs desk that re­sulted in three mi­cro-lenders be­ing ar­rested for re­ten­tion of bank cards and pin num­bers. That’s scary stuff for the loan sharks and good for the gen­eral pub­lic to see the seedy ends of the in­dus­try be­ing cleaned up.

But the sad part is that clients of such mi­cro-lenders were no doubt fi­nan­cially des­per­ate and couldn’t ob­tain credit any­where else, cer­tainly not from SA’s con­ven­tional re­tail banks. A lot of min­ers pass through Rusten­burg.

When it comes to a spot­less credit rat­ing, vig­or­ous in­come gen­er­a­tion and tight cost con­trol, the NCR also sets a high stan­dard in th­ese tur­bu­lent fi­nan­cial times, when so many en­ti­ties are bat­tling. (See ta­ble.)

How’s that for grow­ing in­come off a flat ex­penses base? Over­all, the NCR is hold­ing cash of R61,9m (R48,9m in fi­nan­cial 2008) and cur­rent li­a­bil­i­ties have re­mained al­most level at R30,9m.

How­ever, the NCR has a prob­lem. It hasn’t been able to fill all va­cant po­si­tions, some­thing hard to be­lieve with cur­rent em­ploy­ment con­di­tions so tight. It will con­tinue try­ing to re­cruit staff and, who knows, it might just find a few re­trenched bankers – to give an­other per­spec­tive on credit providers.

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