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WELCOME TO THE NATIONAL CREDIT REGULATOR

The National Credit Regulator (NCR) was established as the regulator for the South African credit industry by the National Credit Act (34 of 2005) (NCA). It is tasked with consumer education, research, policy development, registration of industry participants, investigation of complaints and enforcement of the NCA.

The NCA requires the NCR to promote the development of an accessible credit market, particularly to address the needs of historically disadvantaged persons, low income persons, and remote, isolated or low density communities.

The NCR registers and ensures compliance to the NCA by the following industry participants: credit providers, credit bureaus, debt counsellors, alternative dispute resolution agents and payment distribution agents.

WELCOME TO THE NATIONAL CREDIT REGULATOR

The National Credit Regulator (NCR) was established as the regulator for the South African credit industry by the National Credit Act (34 of 2005) (NCA). It is tasked with consumer education, research, policy development, registration of industry participants, investigation of complaints and enforcement of the NCA.

The NCA requires the NCR to promote the development of an accessible credit market, particularly to address the needs of historically disadvantaged persons, low income persons, and remote, isolated or low density communities.

The NCR registers and ensures compliance to the NCA by the following industry participants: credit providers, credit bureaus, debt counsellors, alternative dispute resolution agents and payment distribution agents.

January 2024 Borrow wisely

January 2024

The festive season is over, the new year is dawning, and sadly for so many cash strapped consumers the harsh reality of January expenses has been a rude awakening from their festive revelries. January is a difficult month, especially for those who did not budget and/or spend wisely over the festive season. Many people are paid earlier in December thus they wait long until the next pay day in January. This long wait leads to very empty pockets and many unpaid bills, as these consumers start the year on a tough note. Consequently, many are being forced into taking excessive credit as the only option to pay for necessities like rent/mortgage, food, school fees, stationery etc. Ms Poppy Kweyama, Manager: Education & Communications at the National Credit Regulator (NCR) says that in addition to the high cost -of- living, consumers might need to borrow excessively at this time of the year because of poor budgeting and last year’s reckless spending.

According to NCR’s statistics for the quarter ended September 2023, there is an increase quarter-on- quarter of impaired accounts. To avoid an impaired credit record, consumers are advised to borrow wisely and responsibly, and restrict credit to only what is necessary, says Kweyama.

Kweyama adds that during this time of the year, some consumers are desperate for financial assistance and may take out loans recklessly, even from unscrupulous credit providers. The NCR implores all consumers who find themselves in this situation to be credit smart and avoid resorting to unregistered credit providers. She advises consumers to borrow only from registered credit providers, borrow only as much as they need, borrow only when they need to, plan in advance how to repay the loans, and most importantly determine whether they can afford the repayments. For a comprehensive list of registered and cancelled / lapsed credit providers, consumers can visit the NCR’s website: www.ncr.org.za.

The NCR also encourages consumers to understand their credit agreements and the T’s and C’s before signing. Don’t sign if you don’t understand the T’s and C’s. Always ask for clarity and never pay an upfront fee. Never leave your ID or bank card with a credit provider in exchange for a loan, not only is this practice illegal, but remember, in order to register and exercise your vote in the 2024 elections, you need to have your ID! cautions Kweyama.

Remember, credit is expensive, before you decide to borrow first familiarise yourself with the fees and charges associated with the credit. According to the National Credit Act (NCA), consumers can only be charged the following fees when taking up credit:

  • Initiation fees- This is a fee that a credit provider charges a consumer for entering into a credit agreement. The credit provider must give the consumer an option of paying this fee separately and once off, in doing so, no interest may be charged on the fee. Initiation fees are regulated by the NCA. Standard initiation fees for credit facilities, short-term credit transactions and unsecured credit transactions, in accordance with the NCA, is R165 per credit agreement plus 10% of the amount in excess of R1000 but the maximum initiation fee should not exceed R1050.

 

  • Interest Rate- Interest is the amount that a credit provider charges a consumer on the outstanding balance of a credit agreement and is regulated by the NCA.
  • Service fees-The fee that a credit provider charges for servicing and administering/maintaining the credit agreement. The credit provider can charge this fee monthly. Service fee can also be charged per transaction. The maximum monthly service fee in accordance with Section 105 of the NCA is R60.
  • Credit Life Insurance- This is insurance which can be required by the credit provider when a consumer applies for credit. The insurance covers the debt due to the credit provider in certain cases such as retrenchment, disability or even death of the consumer. The insurance cover taken may not exceed the outstanding obligation to the credit provider.
  • Other costs will depend on what you are purchasing as the consumers. Such as delivery costs etc.

ENDS


About The National Credit Regulator
The National Credit Regulator (NCR) was established as the regulator under the National Credit Act (NCA), 34 of 2005 and is responsible for the regulation of the South African credit industry. The NCR is mandated with the registration of Credit Providers, Credit Bureaus, Debt Counsellors, Payment Distribution Agents, and Alternative Dispute Resolution Agents; and monitoring their conduct in compliance with the National Credit Act as amended. The NCR offers education and protection to consumers of credit in promotion of a South African credit market that is fair, transparent, accessible, and dynamic.

For more information contact:
Media Office: This email address is being protected from spambots. You need JavaScript enabled to view it. Or
Winnie Rabathata/ Didi Sebothoma
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it./ This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.ncr.org.za

#JanuaryMatters! Spend Wisely and Be Credit Smart

December 2023

Black Friday and Cyber Monday have set the festive season ball rolling and while it is time for celebration and joy, unfortunately, some often indulge in extravagant, and impulsive spending. It is easy to get caught up in the exhilaration of the festive season that could lead to overspending, and only regret it in January, when bills start rolling in. The stark realisation of the need to eat, pay bills (rent/bond, school fees etc.) becomes a reality. #JanuaryMatters! Accordingly, with the correct decisions, including a few cautious spending decision and a dose of financial discipline during the festive season, consumers can still celebrate the festive season without breaking their banks and blowing their budgets, says Ms. Poppy Kweyama, Manager: Education and Communications at the National Credit Regulator (NCR).

Ultimately, the festive season is a time for celebrations and togetherness, but it should not lead to financial stress and over indebtedness in the new year. By planning their finances well, making wise spending and credit decisions, placing priority on debt repayment, and refraining from impulsive purchases, consumers can ensure that this festive season is not only joyous but also financially responsible. Using some of the NCR’s tips and tricks for smart budgeting and planning, consumers can create lasting memories without blowing their budgets, says Kweyama.

Kweyama further urges consumers not to blow their bonuses and December salaries while in a festive spending mood. The fact that some consumers receive their December salary earlier than usual and possibly a bonus as well, is not an excuse to over-spend.  Consumers must remember that December is no different from all the other months.  Consumers must continue to budget their December salaries as they do for all the other months. Bonuses must be used wisely to pay off debts and for savings. It is important for consumers to pay for necessities first before luxuries, and to also remember their debit orders.
The previous, consistent, upward swing of the interest rate throughout the first half of 2023 resulted in increased debt re-payment instalments, this, coupled with cost-of-living increases have placed consumers  under severe financial pressure. The NCR urges consumers to plan and monitor their spending this festive and take heed of the following tips:

  • List down the necessary festive spending
  • Compile a festive budget and make shopping lists to manage your expenses
  • Pay your accounts on time and in full
  • Avoid using credit cards unnecessary
  • Always remember that Cash is King – (if you don’t have cash for it, you don’t need it).
  • Don’t spend money on a “soft” lavish lifestyle to impress others
  • Do not replace presence with presents
  • Compare prices between different retail stores
  • Beware of scams if you decide to shop online
  • Read and understand the terms and conditions
  • Save money for January expenses
  • Live within your means during festive season

ENDS


About The National Credit Regulator
The National Credit Regulator (NCR) was established as the regulator under the National Credit Act 34 of 2005 (NCA) and is responsible for the regulation of the South African credit industry. The NCR is mandated with the registration of Credit Providers, Credit Bureaus, Debt Counsellors, Payment Distribution Agents, and Alternative Dispute Resolution Agents; and monitoring their conduct in compliance with the National Credit Act as amended. The National Credit Regulator offers education and protection to consumers of credit in promotion of a South African credit market that is fair, transparent, accessible and dynamic.

For more information contact:
Media Office: This email address is being protected from spambots. You need JavaScript enabled to view it.
Or
Winnie Rabathata
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: www.ncr.org.za

NCR and IFC Tech Competition Fosters Financial Inclusion and Empowers Small Credit Providers in South Africa

October 2023

The National Credit Regulator (NCR) and the IFC - International Finance Corporation have come together to bring about an innovative competition aimed at supporting the digitisation and regulatory compliance of small credit providers in South Africa.

The initiative will incorporate a TechSprint and subsequent Showcase event, engaging software developers and technology teams to create robust, cost-effective solutions and showcase ready to be introduced to the market solutions. These solutions are specifically targeted towards small credit providers, with the ultimate objective of enhancing financial inclusion for underserved borrowers.

The two events aim to leverage technological innovation to improve the resilience and compliance of small credit providers. The TechSprint week, also referred to as the Hackathon, will take place from 16 to 19 October 2023. Participating teams will have four days to build prototype solutions, with support from industry experts who will provide valuable insights to the participating team.

A demo day will follow on 20 October 2023, where the tech teams will present their prototypes to a panel of judges. At the end of the presentation, winners will be announced, with the prize that includes an incubation programme aimed at assisting the winner to take their solution to market.

The Showcase event will take place on 24 October 2023 where tech companies will Showcase their existing solution geared on improving resilience, inclusion, and compliance with the National Credit Act (NCA).

Small credit providers play a significant role within the South African financial ecosystem, serving the base of the pyramid and the last mile, “many of these providers encounter challenges in complying with Regulation 19 (13) of the (NCA), which prescribes the requirement for credit providers when submitting credit information to a credit bureau. This barrier in many cases serves as a limitation for individuals from participating in and contributing to the expansion of the national economy. With the support of our partners, the NCR had to find innovative ways to solve these challenges” the NCR Chief Executive Officer, Nomsa Motshegare said To learn more about the NCR Onboarding TechSprint and Showcase visit: https://www.ncr.org.za/index.php/publications/techsprint for more information.

About The National Credit Regulator (NCR)

The National Credit Regulator (NCR) was established in terms of the National Credit Act, (NCA) 2005 (Act 34 of 2005)) and is responsible for the regulation of the South African credit industry. The NCR is mandated with the registration of Credit Providers, Credit Bureaus, Debt Counsellors, Payment Distribution Agents, Alternative Dispute Resolution Agents; and monitoring their conduct in compliance with the NCA. The NCR offers education and protection to consumers of credit in promotion of a South African credit market that is fair, transparent, accessible, and dynamic.

About International Finance Corporation (IFC)

The International Finance Corporation (IFC), a member of the World Bank, is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.

Ends


For more information contact:

Jacqueline Baloyi
National Credit Regulator (NCR) Phone: +27 64 752 3920
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.ncr.org.za

For interviews contact:
Winnie Rabathata
National Credit Regulator (NCR) Phone: +27 64 752 3923
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. Website: www.ncr.org.za

Credit Extension slows down while impairments worsen.

October 2023

Today, the National Credit Regulator (NCR) released the Consumer Credit Market Report (CCMR) and the Credit Bureau Monitor (CBM), which are based on data submitted by the registered credit providers and credit bureaus respectively. The latest edition of the reports covers credit market information from April 2023 to June 2023. The total value of new credit granted increased by 0.15% quarter-on-quarter from R141.78 billion to R141.99 billion. The number of credit agreements entered-into increased by 6.66% quarter-on-quarter from 3.79 million to 4.04 million.
The following were some of the most significant trends observed in terms of credit granted for the quarter ended June 2023:

  • The value of new mortgages granted increased by R2. 75 billion (6.09%) quarter-on-quarter and decreased by R9.69 billion (16. 85%) year-on-year.
  • Secured credit, which is dominated by vehicle finance, decreased by R480.03billion (1.06%) quarter-on-quarter, and by R153.55 million (0.34%) year-on-year.
  • Credit facilities decreased by R1.14 billion (4.80%) quarter-on-quarter and by R1.66 billion (6.85%) year-on year.
  • Unsecured credit decreased by R354.87 million (1.53%) quarter-on-quarter, and by R4.08 billion (15.14%) year-on-year.
  • Short-term credit increased by R235.09 million (11.14%) quarter-on-quarter and by R156.06 million (7.13%) year-on-year.

The total outstanding consumer credit balances (or gross debtor’s book) as at June 2023 was R2.31 trillion, representing an increase of 0.74% quarter-on-quarter and by 5.81% year-on-year. The trends for outstanding balances for the quarter ended June 2023 were as follows:

  • Mortgages debtors book increased by R8. 62 billion (0. 72%) quarter–on-quarter and by R64.58 billion (5.65%) year-on-year.
  • Secured credit debtors book increased by R3.02 billion (0.61%) quarter-on-quarter and by R22.03 billion (4.59%) year-on-year.
  • Credit facilities debtors book increased by R5. 40 billion (1.73%) quarter-on-quarter and by R30.97 billion (10.81%) year-on-year.
  • Unsecured credit debtors book decreased by R910.18 million (0.41%) quarter-on-quarter and increased by R5.26 billion (2.43%) year-on-year.
  • Short-term credit debtors book increased by R106.08 million (5.07%) quarter-on-quarter and by R339.78 million (18.27%) year-on-year.

Credit bureaus held records for 27.05 million credit-active consumers, which was a decrease of 0.05% when compared to the 27.07 million in the previous quarter. Consumers classified in good standing decreased by 215,482 to 17.03 million. This amounts to 62.95% of the total number of credit-active consumers. The number of credit-active accounts decreased from 90.44 million to 90.21 million in the quarter ended June 2023. The number of impaired accounts has increased from 19.13 million (21.15%) to 19.29 million (21.38%) in June 2023, an increase of 158 725 quarter-on-quarter and 26 685year-on-year.

The interest rate cycle has been on an upward swing placing consumer’s payment obligations under severe financial pressure as a result of increased debt re-payment installments. The NCR urges consumers to plan and monitor their spending by drawing up a monthly budget and making shopping lists to manage their expenses. The NCR encourages consumers battling with debt repayments to contact their credit providers for assistance with payment re-arrangements. Consumers must not avoid credit providers when in distress.

In the worst-case scenario, consumers are urged to contact their nearest registered debt counsellors to seek help. Debt counselling is intended to assist consumers who are over-indebted. Over-indebtedness is a state where the consumer ‘s income is not sufficient to cover all financial obligations and living expenses. A registered debt counsellor should be able to assist the consumer with budget advice and debt restructuring, says Mr Ngoako Mabeba, the Statistics and Research Manager at the NCR.

Comparisons in this release- ‘quarter-on-quarter’ refers to a comparison between the March 2023 and June 2023 quarters, and ‘year-on-year’ refers to a comparison between the June 2022 and June 2023 quarters.

ENDS


About The National Credit Regulator
The National Credit Regulator (NCR) was established as the regulator under the National Credit Act 34 of 2005 (NCA) and is responsible for the regulation of the South African credit industry. The NCR is mandated with the registration of Credit Providers, Credit Bureaus, Debt Counsellors, Payment Distribution Agents, and Alternative Dispute Resolution Agents; and monitoring their conduct in compliance with the National Credit Act as amended. The National Credit Regulator offers education and protection to consumers of credit in promotion of a South African credit market that is fair, transparent, accessible and dynamic.

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