Trade and Industry Minister Mandisi Mpahlwa said that Government has made significant progress in transforming the economy towards the goal of harnessing the full potential of all the country's people and resources. He was speaking in a pre-recorded address at the inaugration of the National Credit Regulator (NCR) in Johannesburg on Wednesday evening, 30 August 2006.
"In doing this we have taken care not to achieve growth at the expense of equity," stated Mpahlwa. "Where industries require regulation, we have established mechanisms that unlock the potential economic benefits of that industry while at the same time protecting the vulnerable, minimising social cost and promoting the transformation of the economy."
The new framework, established on 1 June 2006 in accordance with the National Credit Act, therefore aims to support the development of a consumer credit market that would be of benefit to all consumers, while simultaneously providing protection against over-indebtedness and assisting consumers who over-extend themselves.
"Clearly, without the required resources and mechanisms to enforce the provisions, the Act will be ineffective and redundant," said Mpahlwa.
Mpahlwa pointed out that the NCR will play a pivotal role in ensuring proper implementation of the provisions of the National Credit Act.
Speaking at the inauguration event, Gabriel Davel, CEO of the NCR, accepted this challenge and emphasised that the regulator is well equipped to discharge its responsibility of ensuring compliance and educating consumers about their rights.
"The NCR is responsible for the regulation of the South African consumer credit industry. It is tasked with carrying out education, research, policy development, investigation of complaints and ensuring compliance with the Act," explained Davel.
According to Davel, the regulator's confidence is borne by the fact that key players in the affected industries, such as credit bureaux, banks, and retailers, have expressed their support for the Act and their commitment to comply with it.
The Minister also pointed out that access and cost of capital for low-income people remains a problem after 10 years of democracy, reflecting and reinforcing the "two economies" that exist in South Africa :
Furthermore, said Mpahlwa, the Act will unlock the enormous benefit of credit to small business development and housing finance. "I trust that the National Credit Regulator will deliver on its mandate, and ensure the normalisation of the South African consumer credit industry," he concluded.
