President Cyril Ramaphosa has signed into law the debt relief bill. The bill provides for the write-off of the debt of heavily indebted consumers who earn a monthly income of R7, 500.
The bill will only cover unsecured debt amounting to R50 000.
The National Treasury estimates that the debt relief proposals could result in the write-off of R13 billion to R20 billion debts.
The banking industry opposed the proposals, saying this would results in a restriction of credit to the low-income earners. This will mean that credit providers would have to price in the additional risk.
The Democratic Alliance (DA) also strongly opposed provisions of the bill. The DA said that the party is dismayed that President Ramaphosa has signed into law the deeply flawed and possibly unconstitutional bill.
It argues that the bill will increase the cost of credit for low-income earners and weaken the fight against illegal lenders.
Congress of South African Trade Unions (Cosatu) says the new law should be implemented without delay.