Credit Act stunts eco­nomic growth

Weekend Argus (Saturday Edition) - - COMMENT -

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.

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