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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.

Borrow Wisely. T’s and C’s apply!

January 2023

“Excessive spending during festive season, places pressure on household disposable income, making the new year not so prosperous. The sad reality is that not everyone is beginning the new season debt free. Some are already in a state of financial distress after acquiring more debt pre- or/during the festive season. For them to meet basic necessities they had to borrow money to stay afloat. And if indeed borrowing is the only solution suitable to your personal circumstances, borrow wisely and responsibly!” said Ms Kweyama, Manager: Education and Communication at the National Credit Regulator (NCR).

Ms Kweyama added that borrowing wisely and responsibly mean consumers should ensure that they only borrow what they need and can afford to pay back in full, and within the stipulated timeframe. Although the National Credit Act (NCA) dictates that credit providers must conduct an affordability assessment to determine if a consumer qualifies for credit, a responsible and honest consumer must fully and truthfully disclose information on all his/ her financial obligations, in particular income and expenditure to enable the credit provider to conduct accurate affordability assessment.

She warned, “Unfortunately in many instances when consumers realise that when they honestly disclose their expenses, they would not be eligible for credit, they tend to understate their expenditure and overstate their income in order to qualify. As a result, they

find themselves in huge amounts of debt – which they are unlikely to repay at all or repay on time”.

Another popular method of accessing short term credit quickly is pawning valuable items like furniture, jewellery, vehicles, etc. in exchange for cash. The pawnbrokers hold assets as security and in most cases, consumers are given a short-term to repay the loan in full. However, should one default on the repayment, pawnbrokers can sell their assets to recoup the money loaned to them. Before signing on the dotted line, ensure that you understand the terms and conditions of a pawn transaction, because very often the interest rates charged are quite high and most pawnbrokers do not disclose fees like storage, insurance, etc. upfront.

Desperation also compels some consumers to seek credit from loan sharks or “mashonisa”- despite many warnings about their unlawful practices. Most “mashonisas”, like some pawnbrokers, are not registered with the NCR. Their modus operandi include retaining consumers’ bank cards, pin codes and identity cards to collect on the loans. Remember, it is illegal for a “mashonisa” or pawnbroker to retain your personal documents. Report this to the South African Police Services and the NCR.

Important considerations before applying for credit:

  • Take an amount of credit that you need and you can afford to repay;
  • If you can, pay cash rather than take credit;
  • Borrow only from registered credit providers;
  • Understand the terms and conditions of a credit agreement;
  • Never leave your bank/SASSA card, pin code, identity document with a credit provider; and
  • If you need a loan, do not pay any upfront

“Borrowing and pawning are expensive and consumers should be careful not to take more than they can afford to pay back as this can often lead to serious financial woes. “Always

keep in mind that when interest rates are increased by the South African Reserve Bank , this is passed on to consumers by credit providers and increases your monthly instalments” concludes Kweyama.

Ends


About The National Credit Regulator

The National Credit Regulator (NCR) was established in terms of the National Credit Act 34 of 2005 (the Act) 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 064 752 392 or Didi Sebothoma 0647523910

E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it. or This email address is being protected from spambots. You need JavaScript enabled to view it.

Website: www.ncr.org.za

Spend wisely during festive season

December 2020

“There is no doubt that consumers spend a lot more during festive season than they would normally during the year, on gifts, food, entertainment, travel, events, spoiling loved one’s etc. While the festive season comes every year and consumers have ample time to plan well in advance, it is unfortunate that many consumers do not plan properly and in the end succumb to the temptation of overspending, using credit cards, bank overdrafts or taking loans to fund festive spending,” said Ms Poppy Kweyama, Manager of Education and Communication at the National Credit Regulator (NCR).

 “With ever increasing cost of living including increased interest rates, consumers need to be financially savvy and, make tough but necessary decisions to scale down on festive spending this year. Sometimes it is worth waiting rather than impulsively using credit to buy non-essential items which would only bring misery. In making festive purchases, consumers should always distinguish between the needs and wants. Otherwise, it means you will begin the New Year with more debts than you intended and ended up being saddled with regrets. Make the most of your money,” she advises.

 On the flip side, If you happen to be one of the lucky ones receiving year-end bonuses and/or 13th cheques, spend it wisely. Always remember the golden rule, pay off your debt first!,” urges Ms Kweyama. “Although it is a bit difficult to define how consumers should spend their year-end bonuses and 13th cheques, if used wisely, it could be just the ticket to start your new year debt free and on the path to a soft life. Even if you don’t earn the big bucks or receive bonuses, be credit smart and prioritise paying your debt so that you can reduce your debt and start saving more. Ideally, start paying off the debt with higher interest rates like credit cards, personal loans etc. By so doing, you’re freeing up cash to acquire other valuable assets or build up an egg nest, and if you are lucky enough to be debt free - consider saving or investing your money”, adds Kweyama.

 However, If you decide to make purchases using credit, read and understand the full cost of credit including the terms and conditions of the credit agreement. When applying for credit on social media platforms, beware of sophisticated scammers posing as legitimate credit providers demanding and putting pressure on consumers to make immediate payment of an upfront fee before releasing the “money” you are borrowing. Never, ever pay any upfront fees no matter what!

Here are practical tips on how to minimize spending during festive season:

  • Plan and save for festive season ahead of time;
  • Pay off existing debt first;
  • Don’t spend money on a “soft” lavish lifestyle to impress others;
  • Do not replace presence with presents;
  • Create a festive season budget which is aligned to available funds and stick to it;
  • Compare prices between different retail stores;
  • Don’t use credit for consumables like food, alcohol and airtime;
  • Beware of scams if you decide to shop online;
  • Save money for January expenses; and
  • Live within your means during festive season.

 Those struggling to keep up with monthly repayment of bills should avoid taking more credit just for few a weeks during festive season. The reality is that festive season is the most wonderful leisure time of the year to relax and unwind with families, beloved ones and friends, but there is still life after festive season. Do not let soft life during festive season lead you to a blacklisting in 2023, concludes Kweyama.

Ends


About The National Credit Regulator

The National Credit Regulator (NCR) was established in terms of the National Credit Act 34 of 2005 (the Act) 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

Didi Sebothoma

064 752 3910

E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Website: www.ncr.org.za

Don’t let Black Friday lead to a Blacklisting!

November 2022

While South African household incomes are tightly squeezed by high interest rates and the ever rising cost of living, many consumers are still looking forward to bag a bargain with Black Friday sales and discounts. Since 2019, Black Friday has become staggeringly popular in South Africa with retailers slashing prices items instore as well as online. However, it is very important for consumers to avoid the hype generated around Black Friday and it does not necessarily mean that every item on sale is a Black Friday bargain.

Education and Communication Manager at the National Credit Regulator (NCR), Ms Poppy Kweyama said, “Although it may make sense to take advantage of Black Friday sales and discounts to save money, beware that unplanned purchases driven by excitement, impulse buying and the fear of missing on bargains sometimes make it much more tempting to buy on credit when you haven’t budgeted and don’t have cash. Irresponsible use of credit is not only expensive, but risky as well. If one takes into account the interest and fees on the credit – it makes the purchase more expensive, so you are not actually saving any money. Taking credit unnecessarily also becomes risky when you are unable to pay back the debt and default on the credit agreement. Don’t let Black Friday lead to a blacklisting.”

Ms Kweyama added, “Buying on credit may be a convenient way of accessing goods and services that you want right now, but sometimes it is worth waiting until your personal finances improve and you can save towards the purchase. Black Friday does not mean you must buy. Some items will be available on sale and discounts at other times or during or after the festive season.” 

In addition, she also gave practical tips on how to avoid being a victim of the Black Friday hype:

  • Do your research: Once you know exactly what you want to buy, compare different stores to get the best deals. It may sound tedious but can save you money;
  • Create a budget and stick to it: Budgeting always helps to control your spending;
  • Avoid impulsive buying: List all items you intend to buy. Do not buy something that you don’t need;
  • Beware of costs and risks associated with online shopping: Normally, online shopping needs credit/debit card details which may not only carry additional costs but may expose you to the risk of cybercrime;
  • Do not spend more than you can afford: Irresponsible use of credit may lead to excessive debt and blacklisting at the credit bureaus which will damage your credit profile.
  • If you are prone to impulse buying or are ill-disciplined stay at home! Do not go to shopping malls and stay offline.

“Avoid succumbing to Black Friday hype. Spend Wisely if you have budgeted. Borrow Wisely if you need a big ticket item or have to make an emergency purchase that is nicely discounted. Whatever you do Be Credit Smart.” concludes Ms Kweyama.

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

Didi Sebothoma

064 752 3910

E-mail: Didi Sebothoma:

Website: www.ncr.org.za

Credit extension marginally slows down

October 2022

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 2022 to June 2022. The total value of new credit granted decreased by 1.13% quarter-on-quarter from R159.16 billion to R157.37 billion. The number of credit agreements entered into increased by 4.68% quarter-on-quarter from 3.83 million to 4.01 million.
The following were some of the most significant trends observed in terms of credit granted for the quarter ended June 2022:

  • The value of new mortgages granted increased by R1.80 billion (3.22%) quarter-on-quarter and by R916.13 million (1.62%) year-on-year.
  • Secured credit which is dominated by vehicle finance, decreased by R2.27 billion (4.78%) quarter-on-quarter, and increased by R1.96 billion (4.55%) year-on-year.
  • Credit facilities decreased by R441.79 million (1.79%) quarter-on-quarter and increased by R3.43 billion (16.47%) year-on year.
  • Unsecured credit increased by R292.42 million (1.10%) quarter-on-quarter and by R4.53 billion (20.18%) year-on-year.

The total outstanding consumer credit balances (or gross debtors book) as at June 2022 was R2.19 trillion, representing an increase of 1.13% quarter-on-quarter and of 6.35% year-on-year. The trends for outstanding balances for the quarter ended June 2022 were as follows:

  • Mortgages debtors book increased by R18.00 billion (1.60%) quarter–on-quarter and by R82.19 billion (7.75%) year-on-year.
  • Secured credit debtors book increased by R1.08 billion (0.23%) quarter-on-quarter and by R20.31 billion (4.42%) year-on-year.
  • Credit facilities debtors book increased by R3.67 billion (1.30%) quarter-on-quarter and by R20.71 billion (7.79%) year-on-year.
  • Unsecured credit debtors book increased by R2.30 billion (1.07%) quarter-on-quarter and by R6.13 billion (2.92%) year-on-year.

Credit bureaus held records for 26.52 million credit-active consumers, which showed an increase of 0.15% when compared to the 26.48 million in the previous quarter. Consumers classified in good standing increased by 197,993 to 16.63 million consumers. This amounts to 62.73% of the total number of credit-active consumers. The number of credit-active accounts increased from 84.73 million to 85.49 million in the quarter ended June 2022. The number of impaired accounts has decreased from 19.59 million (23.12%) to 19.26 million (22.53%) in June 2022, a decrease of 327,075 quarter-on-quarter and 598,021 year-on-year.
Consumers are encouraged to exercise their consumer rights by getting their free credit reports from the registered credit bureaus. A credit report will outline the consumer’s debt and other financial obligations, thus making it easier to draft a budget and work towards the settlement of their debt, thereby improving the state of their credit reports and saving. Consumers who are experiencing financial difficulties and are battling with their debt repayments, should contact their credit providers for assistance. Avoiding credit providers when in distress is not a solution. In worst cases, the assistance of a registered debt counsellor must be sought. Debt counselling was introduced to assist consumers who are over-indebted, advised Nomsa Motshegare, CEO of the NCR.

Comparisons in this release- ‘quarter-on-quarter’ refers to a comparison between the March 2022 and June 2022 quarters, and ‘year-on-year’ refers to a comparison between the June 2021 and June 2022.

ENDS


About The National Credit Regulator
The National Credit Regulator (NCR) was established in terms of the National Credit Act 34 of 2005 (the Act) 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

Didi Sebothoma
064 752 3910
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: www.ncr.org.za

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