Beware of bad loans

Sunday World - - WORLD OF JOBS - For more in­for­ma­tion: e-mail neil@deb­tres­ or visit www.deb­tres­

CREDIT providers, in­clud­ing ev­ery­body from mi­cro lenders, re­tail­ers and the banks, have been served no­tice that if they lend money to over-in­debted con­sumers these loans may be writ­ten off and crim­i­nal steps taken against the di­rec­tors of these com­pa­nies.

Part of the Na­tional Credit Amend­ment Bill which is now be­ing de­bated in par­lia­ment, the new mea­sures will give the Na­tional Credit Reg­u­la­tor (NCR) the power to not only in­ves­ti­gate cases of reck­less lend­ing but to also act against these en­ti­ties and de­clare agree­ments en­tered into with over-in­debted in­di­vid­u­als null and void.

Neil Roets, CEO of one of the largest debt man­age­ment com­pa­nies in South Africa, wel­comed the move. He said it was long over­due be­cause many re­tail­ers and other sup­pli­ers of un­se­cured credit were still break­ing the law on a mas­sive scale by lend­ing money to over-in­debted con­sumers thereby plung­ing them ever deeper into a debt hole. We see ex­am­ples of this on a daily ba­sis “with in­di­vid­u­als who ap­proach us for debt coun­selling in or­der to be placed un­der debt re­view, Roets said.

” Depart­ment of Trade and In­dus­try of­fi­cials said in par­lia­ment last week that they in­tended ex­tend­ing the pow­ers of the Na­tional Credit Reg­u­la­tor to con­duct proac­tive in­ves­ti­ga­tions and im­pose ad­min­is­tra­tive fines on per­pe­tra­tors as well as em­pow­er­ing the min­is­ter to pro­vide debt re­lief mech­a­nisms through reg­u­la­tions. It is be­lieved that this will in­clude mea­sures to for­give debt in cer­tain cir­cum­stances.

NCR CEO Nomsa Mot­she­gare in her ad­dress to the com­mit­tee said the is­sue of debt for­give­ness was cur­rently un­der dis­cus­sion and would in­clude stu­dents and re­trenched work­ers who might have their loans writ­ten off.

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