Credit Act stunts economic growth
ALTHOUGH the introduction of the National Credit Act (NCA) was designed to give greater protection to consumers, and certainly played a critical role in cushioning our country against one of the world’s most brutal recessions, it has also become one of the greatest obstacles in the path to serious economic growth.
Our people are suffering, the national housing backlog is close to two-and-a-half million units, and those who own their own houses are seriously struggling to hang on to them.
The National Credit Act is too stringent. The government needs to amend certain sections of this act as a matter of extreme urgency, or many people could face even greater levels of poverty and hardship – directly as a result of this piece of legislation.
Thousands of people could instantly be removed from the various gover nment housing waiting lists throughout the country if the act is amended, because these people earn enough money to buy their own homes. However, due to specific sections in this piece of legislation, banks and other companies are extremely cautious when it comes to extending credit to consumers who often meet the criteria and pass the affordability tests.
By amending the act, the government would create an environment for ordinary South Africans to help themselves and become less dependent on the government.
It would certainly empower people to buy their own homes and ease the pressure on the government’s housing waiting lists.
Banks would be more willing and flexible in granting credit to consumers and our economy would more than likely create more decent employment opportunities.
I, for one, cannot see any meaningful economic growth, especially in the housing sector, without the National Credit Act being amended urgently.
It has become crystal clear to me that banks are willing to grant credit, including home loans, to desperate and qualifying consumers, but the National Credit Act is preventing them from doing so.
I call upon the government and Parliament to urgently revisit this piece of legislation and make it possible for deserving South Africans, to once again be able to access the credit market.