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.

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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

August 2023

In the past week, the National Credit Regular (“NCR”) embarked on investigations against Debt Counsellors in the Cape Town area following the receipt of numerous complaints of non-compliance with the National Credit Act, 34 of 2005 (“the Act”).

Following resistance, threats, and non-cooperation by certain registrants and/or entities which actions prevented the NCR’s inspector’s from conducting onsite investigations, the NCR requested the assistance of the South African Police Services (“SAPS”) in certain instances.

“In the event that the SAPS is involved, the SAPS may find cause to further investigate allegations by consumers claiming to have been placed under debt review without their consent as such conduct amounts to fraud” says Chief Executive Officer (“CEO”) of the NCR, Ms Nomsa Motshegare.

The NCR’s inspectors are duly appointed by the CEO of the NCR in terms of Section 25 of the Act to conduct investigations into alleged contraventions of the Act.

Inspectors are to be allowed to enter the premises of registrants or any entity or individual against whom a complaint has been initiated and from where activities are performed and/or services rendered at any time during an entity’s normal business hours to conduct the investigation. Furthermore, apart from being a contravention in terms of the Act and Conditions of registration, it is an offence in terms of Section 160 of the Act to hinder the administration of the Act, which includes, but is not limited to, obstructing Inspectors of the NCR from exercising their powers or performing their duties delegated to them in terms of Section 25 of the Act. 

Should there be any doubt or hesitance pertaining the identity of the inspectors, registrants may first engage the NCR directly by way of telephone and email. Such verifications will however not result in a postponement of the investigation.

Individuals and entities are warned that the NCR will not hesitate to invoke all the necessary actions and powers stipulated within the Act, to enable it to discharge its regulatory mandate.

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:
Winnie Rabathata 064 752 3923
Or
Media Office: This email address is being protected from spambots. You need JavaScript enabled to view it.

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.

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