In an effort to aid overburdened low-income citizens, on 15 August 2019, President Ramaphosa signed the National Credit Amendment Act, 7 of 2019 which brings about debt relief interventions for overly indebted consumers.

South African credit bureaus Experian and Compuscan explain the changes of the new legislation signed in by President Ramaphosa.

Qualifying consumers can extract themselves from over-indebtedness by applying for debt intervention at the National Credit Regulator (NCR). The consumer can then be recorded as being under debt intervention at the credit bureaux (similar to a debt review status flag).

The amendments will also allow eligible consumers to apply for various debt relief interventions, including:

  1. restructuring their debt repayment schedule over five years; alternatively suspending repayments for up to 2 years;
  2. extinguishing the debt in whole or part or if after two years the consumer is still unable to pay his/her debt; and
  3. allowing courts to reduce interest charges.

It is important to note that the amendments to the National Credit Act, do not bring about an automatic write-off of debt. Consumers will also not be able to apply for new credit for the duration of being under debt intervention.

Only qualifying individuals may apply for debt intervention, as per the following criteria:

  • The applicant is a natural person who is a consumer under unsecured credit agreements, unsecured short-term credit transactions or unsecured credit facilities and the total unsecured debt is less than R50,000;
  • The applicant should receive no monthly salary, or a monthly salary of less than R7,500 (on average for the preceding 6 months);
  • They should be over indebted due to a change in personal circumstances; and
  • The consumer cannot be sequestrated or under administration.

Experian, Compuscan and Scoresharp now offer clients the opportunity to gauge the impact of the published debt intervention measures on their business. We leverage the power of analytics to generate an impact assessment report, with the optional addition of a breakdown of the analysis to an individual customer level. The impact assessment analysis is suitable for books of any size. Having this information is key in making informed decisions on how you will identify required changes to your business strategy.

Should you wish to have an analysis performed on your customer portfolio, please contact us by calling our Customer Call Centre on 0861 51 41 31 or email [email protected] for further information.

 

Experian and Compuscan South African credit bureaus explain the new legislative changes of the debt intervention laws.

About Experian, Compuscan and Scoresharp

For several decades, Compuscan and Scoresharp were a leading credit bureau and emerging markets information services company, providing data and analytical tools to our clients globally. In 2019, the companies were acquired by international credit bureau, Experian, in order to expand the Experian footprint in Africa, where Compuscan has a prominent credit bureau presence.

Through the power of convergence, Experian, Compuscan and Scoresharp bring clients consumer and commercial credit bureau information, innovations in software, technology, analytics, data management, fraud and risk management, loyalty and rewards, marketing services, and training, at speed and at scale.

Our passion for consumers drives our consumer education efforts as well as our consumer credit report platform, My Credit Check, which gives consumers unlimited access to their full free credit report.

In Africa, the combined company employs over 750 people across 6 countries, bringing with them extensive industry experience and expert academic knowledge. The combined company operates out of two main offices, Compuscan in Stellenbosch and Experian in Johannesburg, South Africa. Further into Africa, our operations extend to Namibia, Botswana, Lesotho, Uganda, Ethiopia, and Mozambique.

Our solutions and services assist our clients through every stage of the Customer Life Cycle. From prospecting to collections, businesses are faced with difficulties and risks associated with lending. Our mission is to support clients with these difficulties and to help mitigate the risks they face.

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