Ramaphosa greenlights Bill seeking to relieve over-indebted citizens

Ramaphosa greenlights Bill seeking to relieve over-indebted citizens

- President Cyril Ramaphosa approved the National Credit Amendment Bill this week

- The debt-relief bill aims to take the burden off of heavily-indebted consumers who earn less than R7500 a month

- The bill has been met with backlash from the Democratic Alliance, which has deemed it 'flawed and possibly unconstitutional'

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President Cyril Ramaphosa has green-lighted the National Credit Amendment Bill, seeking to relieve over-indebted citizens with low incomes.

BusinessLIVE reports that consumers who bring home a maximum of R7 500 and have unsecured debt of a minimum R50 000 will see some much-needed relief.

Treasury forecasts that the proposals may result in R13 billion to R20 billion worth of write-offs under the new law.

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Both the banking industry and the Democratic Alliance have raised objections to the new bill, with the opposition party claiming that the president has signed off on a 'deeply-flawed and possibly unconstitutional' amendment:

“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.”

The banking sector claimed that the proposal would end in a credit restriction to low-income citizens, with credit providers increasing tariffs to price in the new risk.

Briefly.co.za reported that South Africa is battling both low employment rates and a contracted economy, with the president expected to announce the way forward in the next few weeks.

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Source: Briefly.co.za

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