Debt relief bill will cut credit for poor, says Nedbank
The bill will result in the lower-income population seeking to obtain credit through informal channels where the law does not provide sufficient consumer protection
Nedbank is not in favour of a proposed bill on debt relief, saying it entails moral hazard and will harm lower-income groups because credit providers will limit the extension of credit to them in a bid to limit their risk. Nedbank was one of a number of entities that made submissions on the draft National Credit Amendment Bill that has been proposed by Parliament’s trade and industry committee. Submissions were also made during the committee’s public hearings by the Association of Debt Recovery Agents, MicroFinance SA, the Agricultural Business Chamber, the Debt Counsellors Association of SA, the Credit Bureau Association and the South African Institute of Professional Accountants. The bill proposes to give the National Consumer Tribunal the power to extinguish debt in certain circumstances. The targeted group for the envisaged debt relief would be individuals earning a gross monthly income of not more than R7,500, who have no readily realisable assets (excluding exempted items ment...