The men (and even more women) in black
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.