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Lit Black Friday Vibes – Don’t burn your budget!

November 2021

Statistics released by the National Credit Regulator (NCR), as at June 2021, revealed that, 61.59% (16.14 million) of the 26.22 million credit active consumers are in good standing, whilst 38.41% (10.07 million) have impaired records. An impaired record is one which a consumer and/or any of the accounts, are either classified as three or more payments or months in arrears, or which has an “adverse listing”, or that reflects a judgment or administration order. The negative impact of COVID-19 over the last two years on consumers’ finances has caused some financial distress. Therefore, sales such as those on Black Friday should be approached cautiously by consumers to avoid reckless spending and borrowing and possible over- indebtedness, says Anne-Carien Du Plooy, Acting Manager: Education and Communication at the NCR.

Given the hype and the alluring advertising by different retailers, consumers are overcome by the temptation to buy the “specials” and benefit from the “deals” on offer. Such deals may blindside the consumer causing unnecessary credit purchases. Du Plooy reminds consumers that credit purchases don’t actually amount to a savings as you have to pay interest and other fees. Remember, unplanned and impulsive buying, especially on credit, may ultimately damage your credit bureau record and lower your credit score. So it is wise to save and plan your spending for Black Friday and festive season sales, she adds.

Consumers intending to buy on credit should do so responsibly. Check and compare prices before the actual day to source the best deals. Before you commit to a credit agreement, check your budget to establish if you will be able to afford repayments. Always request a pre-agreement statement and quotation and know the real cost of credit after interest and all the other fees have been added, she advised.

Tips to stay financially savvy during Black Friday hype:

Avoid impulsive buying. If you did not plan for this year, rather save for other upcoming “specials” during and beyond the festive season, this is not the end of the world;
Avoid borrowing from unregistered credit providers to feed your temptations;
Set aside the amount you intend to use during Black Friday. Draw up a budget and stick to it. Shopping lists will help to curb excessive spending and unnecessary purchases;
If you will be applying for a loan, only apply for what you need, do not be tempted to apply for more just because you are told that you qualify for more;
Prioritise your debts – pay off your current debt first before spending money on “wants” and making new debt;
Stop comparing yourself with peers and colleagues, everyone has different affordability and budget so don’t compete;
Develop a culture of saving and try to save a little every month towards some goal;
Always live within your means and not your imagination.

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

It is illegal for a credit provider to take a consumer’s ID or cards when granting credit

October 2021

“In terms of the National Credit Act, it is illegal for credit providers to retain consumers’ instruments such as identity documents (IDs), and bank cards when granting credit. This is the modus operandi adopted by some credit providers to enforce credit agreements entered into with consumers”. Ms Anne-Carien Du Plooy, Acting Manager: Education and Communication at the National Credit Regulator said that all people meeting voting requirements have a constitutional right to vote during elections held in the country. The National Credit Regulator is therefore, instructing all credit providers illegally in possession of consumers’ personal instruments to return them to the rightful owners as consumers will need their IDs in order to participate in the upcoming elections, she stressed.

If your bank card or identity document has been taken by a credit provider, you are urged to fetch it from that credit provider. Should they refuse to return these instruments, report the credit provider to your nearest South African Police Service as their conduct constitutes a criminal offence in terms of the National Credit Act, advises Du Plooy.

It is the responsibility of credit providers to thoroughly assess consumers’ applications and conduct an affordability assessment before advancing credit to any consumer. It is in contravention of the National Credit Act to extend credit when you have knowledge that a consumer does not qualify for such a loan. This might constitute reckless credit, she warns.

Du Plooy says that there seems to be confusion about who is supposed to register as a credit provider. In order to clarify this, she explains that it is a requirement for anyone lending money and charging interest, irrespective of the credit amount or the number of clients the credit provider has. Consumers are urged to only use credit providers registered with the National Credit Regulator. Maximum interest rates and other fees such as monthly service fees and once off initiation fees are regulated by the National Credit Act. This means that all credit providers, including smaller ones commonly known as “Loan sharks”, “Mashonisa” or “Skoppers” must adhere to the maximum cost of credit as outlined in the National Credit Act.

If your application for credit is declined, you have the right to be given reasons by the credit provider for the decision. If the reason is, for example, a negative listing at the credit bureau, you need to pay the debt in question for this information to be removed. You do not need to pay a third party for the removal of information at the credit bureau. If the reason is affordability, ensure that you pay your current debt before applying for a new one. Running to unregistered credit providers will be the beginning of your non-ending financial woes, warns Du Plooy.

Consumers should contact the National Credit Regulator for additional information, to lodge a complaint or to report credit providers who keep consumers’ IDs, Bank / SASSA cards at 0860 627 627 or This email address is being protected from spambots. You need JavaScript enabled to view it., concludes Du Plooy.

Ends

For more information contact:

Media Office: This email address is being protected from spambots. You need JavaScript enabled to view it.

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

Mortgages growth holds steady

October 2021

The National Credit Regulator (NCR) released the Consumer Credit Market Report (CCMR) and the Credit Bureau Monitor (CBM). These reports are based on the data submitted to the NCR by registered credit providers and credit bureaus, respectively. The latest edition of the reports covers credit market information from April 2021 to June 2021. The total value of new credit granted increased by 5.81% quarter-on-quarter from R138.81 billion to R146.87 billion. The number of credit agreements entered into increased by 9.63% quarter-on-quarter from 3.20 million to 3.50 million.
The following were some of the most significant trends observed in terms of credit granted for the quarter ended June 2021:

The value of new mortgages granted increased by R2.32 billion (4.27%) quarter-on-quarter and by R43.60 billion (335.77%) year-on-year.
Secured credit which is dominated by vehicle finance, increased by R2.23 billion (5.45%) quarter-on-quarter, and by R22.67 billion (110.50%) year-on-year.
Credit facilities increased by R1.18 billion (6.02%) quarter-on-quarter and by R11.33 billion (119.24%) year-on year.
Unsecured credit increased by R2.32 billion (11.51%) quarter-on-quarter and by R12.23 billion (119.71%) year-on-year.

The total outstanding consumer credit balances (or gross debtors book) as at June 2021 was R2.05 trillion, representing an increase of 0.95% quarter-on-quarter and of 4.64% year-on-year. The trends for outstanding balances for the quarter ended June 2021 were as follows:

Mortgages debtors book increased by R18.16 billion (1.74%) quarter–on-quarter and by R76.48 billion (7.77%) year-on-year.
Secured credit debtors book increased by R3.12 billion (0.68%) quarter-on-quarter and by R16.06 billion (3.62%) year-on-year.
Credit facilities debtors book increased by R1.53 billion (0.58%) quarter-on-quarter and by R8.66 billion (3.36%) year-on-year.
Unsecured credit debtors book decreased by R2.77 billion (1.30%) quarter-on-quarter and by R10.72 billion (4.85%) year-on-year.

Credit bureaus held records for 26.22 million credit-active consumers, which showed a decrease of 4.77% when compared to the 27.53 million in the previous quarter. Consumers classified in good standing decreased by 868,581 to 16.14 million consumers. This amounts to 61.59% of the total number of credit-active consumers. The number of credit-active accounts decreased from 85.09 million to 85.08 million in the quarter ended June 2021. The number of impaired accounts has decreased from 20.18 million (23.71%) to 19.86 million (23.34%) in June 2021, a decrease of 313,348 quarter-on-quarter and 796,144 year-on-year.

The number of credit reports issued to consumers increased from 584,437 to 588,018. A total of 548,150 (93.22%) credit reports were issued free of charge, and the balance of 39,868 (6.78%) were issued at a cost. There were 30,844 disputes lodged on information held on consumer credit records for the quarter ended June 2021.

It is by no doubt that, COVID-19 has had a financial impact on consumers as some have lost employment whilst others have had a reduction in their income. This has therefore; put a lot of strain to immediate families and even extended families. The NCR continues to encourage those consumers who are battling with their debts to use available debt relief mechanisms such as contacting one’s credit providers and re-negotiating payment terms, if this fails, consumers can consider debt counselling. A list of all registered debt counsellors is available on the NCR’s website (www.ncr.org.za or by calling 0860 627 627). Credit life insurance is also an option to be considered where necessary. In order to know if you have credit life insurance, consumers should check their credit agreements or contact their credit providers for assistance, says Nomsa Motshegare, the Chief Executive Officer (CEO) of the NCR.

Comparisons in this release- ‘quarter-on-quarter’ refers to a comparison between the March and June 2021 quarters, and ‘year-on-year’ refers to a comparison between the June 2020 and June 2021 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.

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

Looting mayhem has cost some consumers dearly

August 2021

The recent looting mayhem in Gauteng and KwaZulu-Natal has, with no doubt, cost some employees and owners of the vandalised premises dearly as some are unable to make monthly repayments towards their debts. This is as a result of the job losses or salary reduction or temporary unemployment as some people will only be called back to work once businesses start functioning again. This means that when business owners are trying to rebuild, many people will be unable to make monthly repayments towards their debts, says Anne-Carien Du Plooy, Acting Manager: Education & Communication at the National Credit Regulator (NCR).

The destruction caused by the looters has left not only business owners, insurers and the government bearing the financial brunt, many others in the value chain such as employees of the vandalised and looted establishments, their families and surrounding small businesses are also affected financially. “If you are a consumer of credit affected by the looting activities that transpired in Gauteng and KwaZulu-Natal leaving you unable to meet your monthly obligations, please inform your credit providers for debt relief assistance”, advises Du Plooy. Missing repayments will, no doubt affect consumers’ credit reports at the credit bureaus, hence it is imperative for consumers to contact their credit providers soonest.

Du Plooy also reminds consumers that credit life insurance which covers the outstanding debt in the event of unforeseen circumstances such as death, retrenchment, unemployment, inability to earn an income, disability and others can be a debt relief measure for those who qualify for it. Consumers are urged to check if their credit agreements are covered by credit life insurance because in the event of the consumer becoming unemployed or unable to earn an income, the credit life insurance cover provides that credit providers must settle / pay the consumer’s debt for a period of twelve (12) months or for the remaining repayment period or until the consumer finds employment or is able to earn an income, whichever period is shorter. Consumers who would like to use this relief measure but battling to get assistance from their credit providers can send a complaint to the National Credit Regulator. However, it is important for consumers to remember that in order to benefit from credit life insurance, all installments for the credit agreement covered by the credit life insurance must be up to date.

Consumers whose income has been reduced may consider debt counselling as a debt relief solution. Debt counselling is a debt relief measure intended to assist over-indebted consumers struggling with debt, through budget advice, negotiation with credit providers for reduced payments, extension of repayment term and restructuring of debt.

For further advice on other debt relief options available in terms of the National Credit Act or further explanation on the above, consumers are welcome to contact the National Credit Regulator on 0860 627 627 or www.ncr.org.za, concludes Du Plooy.

Ends

For more information contact:

Media Office: This email address is being protected from spambots. You need JavaScript enabled to view it.

Didi Sebothoma – 064 752 3910
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Or

Winnie Rabathata - 064 752 3923
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

NCR Share call: 0860 627 627
Website: www.ncr.org.za