A draft bill giving the National Consumer Tribunal the power to extinguish debt in certain circumstances has been published for public comment by Parliament’s trade and industry committee.
The targeted group for debt relief are individuals earning monthly salary of R7500 and below-and have debt of less than R50 000.
The draft National Credit Amendment Bill also provides for mandatory credit life insurance on all credit agreements longer than six months with a value of less than R50 000.
Parliament’s trade and Industry committee says they created the bill due to concerns about the high levels of consumer debt.
According to a 2015 World Bank report South Africans are the world’s biggest borrowers. Many consumers either fail to pay their debt or fall behind in debt repayments.
National Credit Regulator Lesiba Mashapa says, “The indebted will apply to the NCR and we will then evaluate the application and the application must be supported by their proof of income, their expense, their debt and credit insurance and if they qualify for debt intervention we will then make an application to the National Consumer Tribunal with a recommendation to approve.”
The National Consumer Tribunal is a body established under the National Credit Act. Its role is to adjudicate on applications made in terms of the National Credit Act.
