The National Credit Regulator (NCR) says it will appeal against a high court order setting aside recently promulgated caps on rates and fees in short-term credit agreements. The court ordered that these be reviewed after finding that neither the regulator nor the trade and industry minister had meaningfully considered the effect these caps would have on the microlending industry and the provision of short-term credit to consumers. Short-term credit refers to loans not exceeding R8,000, repayable in six months or less. The NCR and the minister had failed to comply with the requirements of the National Credit Act by not providing any research about how they arrived at the rate and fee caps on these loans, the court found. Neither party had tackled the contention of MicroFinance SA, which represented about 500 microlenders, that the amended fees and interest rates did not reflect the true cost of providing credit and would put many of its members out of business, impairing access to cr...
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