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Cabinet has agreed to a credit amnesty despite the strong opposition of the banking

6 Sep 2013

THE Cabinet has agreed to a credit amnesty despite the strong opposition of the banking industry, which says it will undermine the ability of credit providers to assess risk.

Article by Linda Ensor, 05 September 2013, 11:19, Business Day

THE Cabinet has agreed to a credit amnesty despite the strong opposition of the banking
industry, which says it will undermine the ability of credit providers to assess risk.
The Banking Association of South Africa has warned that banks are likely to increase the
price of credit in the light of the increased risk.
The select committee on trade and international relations of the National Council of
Provinces has been the driving force behind getting the credit amnesty accepted, a move
critics interpret as an election ploy to garner more votes.
The amnesty will involve the removal of adverse credit information kept by credit bureaus,
especially on consumers who have paid their debts, a Cabinet statement released Thursday
said.
The Cabinet statement said the credit amnesty "seeks to address the issue of access to credit
to those South Africans that can afford credit. These are consumers who may have paid their
debts in full and are in a position to afford credit but whose access is currently impeded by
negative credit information on their record."
Cabinet spokeswoman Phumla Williams said the amnesty was intended to ensure the
National Credit Act worked as intended in terms of ensuring consumers who could afford
credit could obtain it.
"Inaccessible or expensive credit hinders growth. Access to sustainable credit market is
essential to all developmental goals."
The Cabinet also approved the National Credit Amendment Bill for introduction to
Parliament.
The bill aims to strengthen the capacity of the National Credit Regulator to address certain
challenges especially around court processes and to strengthen enforcement of the National
Credit Act.
The Cabinet statement said the Department of Trade and Industry had concluded after a
comprehensive review undertaken last year that the policy framework on consumer credit,
which formed the basis for the National Credit Act was "sound and relevant".