Ramaphosa signs controversial debt-relief bill into law

; have unsecured debt amounting to R50,000; and who have been found to be critically indebted by the National Credit Regulator.The Treasury estimates that the debt-relief proposals could result in the write-off of R13.2bn to R20bn of debt, which is the total amount of debt falling under the debt-extinguishing provisions of the bill.

“The amendment bill, will increase the cost of credit for low income earners, weaken the fight against illegal lenders and negatively disrupt the credit market while posing a financial risk to the state, when SA consumers are already under enormous financial strain,” said Macpherson “The DA is concerned that this act will increase, instead of decrease, the appetite among low-income earners to incur more debt with no intention of ever paying it back, creating a massive moral hazard, as long as they remained within the legislated threshold of indebtedness.”

Macpherson said the DA advocates for credit legislation that protects consumers from debt traps and illegal lending while ensuring the sustainability of the credit markets. “It targets in particular households headed by children, persons with disabilities and women ... It is not reckless as claimed by the banking association. It is reasonable, balanced and will give a helping hand to those who need it most,” Cosatu said.

• Restructuring their debt repayment schedule over five years or, if not possible, then suspending credit payments for 12-24 months with regular reviews;

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