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NATIONAL CREDIT BILL PUBLIC HEARING PRESENTATION BY:. WHO WE ARE. 3 million borrowers Section 21 Company PriceWaterhouse Coopers 1250 microfinance offices registered /growing Largest industry body in SA Committed to a sustainable future for the industry. “ The Loan Shark is Dead”.
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NATIONAL CREDIT BILL PUBLIC HEARING PRESENTATION BY:
3 million borrowers • Section 21 Company • PriceWaterhouse Coopers • 1250 microfinance offices registered /growing • Largest industry body in SA • Committed to a sustainable future for the industry
DEFINITIONS • “Incidental credit agreement” - exclude credit agreements – ensure total Inclusivity of all Credit Providers • Educational loans - Loans to minors - Reckless Lending - Area for growth / impact
For Consideration • (79) 3(a)Over-indebtness settlement • (80) 3(a) Reckless Credit – Credit Limit • 101:3 a+b Ensure all players are treated equally – Include Banks?
PAWN BROKERS • Currently, “exempt” from the Bill • Impact on Second Economy • Lending on pawn broker premises must be subject to the Bill. Full registration • Area for potential abuse
CREDIT BUREAUS • Need to be Regulated • Essential part of value chain – high Impact on consumer and market
CREDIT AGREEMENTS • Bill describes “small credit agreements” • R50 000 minimum (Housing & SMME) • Term Lending • 30 Day Lending / Emergency
NATIONAL CREDIT REGULATOR • Mandatory interaction with the industry essential • Regulations need to be Practical • Proper consultation leads to solutions, growth and consumer development
REGISTRATION REQUIREMENTS • Suitable timeframes for the implementation of BEE • Funding for growth / ownership
OVER-INDEBTEDNESS • Emergencies are a reality • Microfinanciers know their customers – personally!! • Lenders – open books for inspection
UNLAWFUL AGREEMENTS • National Payment System • Card & Pin = Pref Debits • Equal access for all players
DEBT COUNSELLORS • Critical and challenging • High standards - skills, insight, experience and maturity • Consistency.Nationally • Technology: EFFICIENCY
CONSUMER RIGHTS • Official languages and documentation - Regulator should provide one standard contract • 95% of microfinanciers serve consumers in their mother tongue
CONSUMER EDUCATION • The most powerful consumer is an informed consumer • Matter of National Interest • Joint responsibility • Requires mega- thinking • Project – 10 years
INTEREST RATES, FEES AND CHARGES • Impact of the cap on interest: consider practical issues – Term and 30 day Loans • Caps do not Improve Access • Don’t feed the Loan Shark