National Credit Regulator Registration and Compliance Division Oct - - PowerPoint PPT Presentation

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National Credit Regulator Registration and Compliance Division Oct 2012

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• Marketing

practices & disclosure Agreements & quotes Unlawful agreements, provisions Unlawful agreements, provisions

Credit Bureaus National Credit Register

Enforcement & debt collection Reckless lending Interest & fees NCA

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Functions of the NCR

• The National Credit Regulator derives its mandate from the National Credit Act

(NCA/the Act) 34 of 2005. Paramount among its duties is the:

• Creation of an accessible credit market
• Registration

Credit Providers Debt Counselors Credit Bureaux

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Functions of the NCR

• Enforcement

– dispute resolution, – receiving and investigating complaints – contraventions of the NCA

• Awareness through

– research and publication of industry trends

• Reporting on credit information

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Registration & Compliance milestones as at 30 September 2012

Registration

5 227 credit providers 5 227 credit providers 1 965 debt counsellors

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Focus on developmental credit

• In terms of S. 13 of the NCA, one of the duties of the NCR is to

create an accessible credit market to serve the needs of among others:

• Historically disadvantaged persons:
• Low income persons and communities; and
• Remote; low density populations and communities in a

manner consistent with the Act

What are developmental credit agreements?

• In terms of S. 10 of the NCA, an agreement irrespective of its

form; type or category is a developmental credit agreement if:

• At the time the agreement is entered into, the credit provider

holds a supplementary registration certificate issued in terms

• f an application issued in terms of S.41, and

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What are developmental credit agreements? (Cont.)

• The credit agreement must be:
• Between a credit cooperative as credit provider and a member of that

cooperative:

• An educational loan; or entered into for any of the following purposes:
• Development of a small business;
• The acquisition; rehabilitation, building or expansion of low income

housing or

• Any other purpose prescribed by the Minister in terms of S. 10 (2) (a).

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Who may register as a developmental credit provider?

• A registered credit provider or an entity who has applied to be registered

as a credit provider in terms of S. 40, may apply for supplementary registration as a developmental credit provide; provided:

• It is a juristic entity;
• Is registered with the South African Revenue Service (SARS); and
• Does not employ or have an individual who would be disqualified from

individual registration in a controlling or management capacity.

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What other factors are taken into account?:

• Supplementary registration as a developmental credit

provider will only be granted of the NCR concludes that:

• The credit provider has sufficient human; financial and
• perational resources to efficiently and effectively carry out

its functions in terms of the Act, or presents the NCR with a credible plan to acquire or develop those recourses.

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What other factors are taken into account? ( Continued)

• The Credit provider must also show that it has adequate

administrative procedures and safeguards to justify the application of statutory exceptions to from the Act, or present the NCR with a credible plan to develop those procedures and safeguards before entering into any developmental credit agreement.

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The advantages of being a developmental credit provider

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The advantages of being a developmental credit provider

• Statutory exceptions to certain provisions of the NCA.
• In terms of S. 78 of the NCA, S. 81- 84 of the Act in as

far as they relate to reckless credit, do not apply to the following:

1. a school loan or educational loan; 2. an emergency loan; 3. a public interest credit agreement; 4. a pawn transaction 5. an incidental credit agreement; or 6. a temporary increase in the credit limit under a credit facility

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The advantages of being a developmental credit provider

• Further, in terms of S. 82(2) of the NCA, the National Credit

Regulator may pre-approve the evaluative mechanisms; models and procedures to be used in terms of S. 81 in respect

• f proposed developmental credit agreements.

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Summary of benefits

• In a nutshell, the advantages of being a developmental

credit provider are: a) higher interest rate that a credit provider can charge in respect of developmental credit agreements in comparison to other categories of credit agreements; and b) statutory exceptions to the reckless lending provisions of the NCA provided certain preconditions are met.

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Challenges

• The primary challenge is that there are very few

developmental credit providers currently registered with the NCR.

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96% 4%

Credit Provider Categories

CP DCP

Questions

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Thank you www.ncr.org.za Tel 0860 627 627