Up to R20bn at stake in proposal to extinguish debts of low-income earners
Treasury estimates total debts of between R13.2bn and R20.7bn could be affected by a proposed debt extinguishment, with banks and retailers hardest hit. Treasury made a presentation to Parliament’s trade and industry committee on Tuesday during public hearings on the proposals, contained in the National Credit Amendment Bill. The committee has proposed amendments to the National Credit Act including writing off the debt of those earning below R7,500 a month who fall within the threshold of realisable assets. The write-offs would follow after a protracted process. According to research by consultancy firm Eighty20, 56% of the credit-active market of about 18-million people earn R7,500 a month or less. "Based on the income estimates, approximately 9-million borrowers could meet the eligibility criteria for debt intervention as per the draft bill," the organisation said in its presentation to the committee. "In total borrowers who could qualify for debt review hold over 16-million loan...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.