At the end of March 2017, 24.68 million consumers were credit-active in South Africa, of which 14.99 million were in good standing. The balance either had impaired records (three or more payments or months in arrears) or ‘‘adverse listing’ (a judgment or an administration order).

The Bill aims to provide for capped debt intervention to promote a change in the borrowing and spending habits of an over-indebted society. The Bill will provide relief to South Africans who have no other effective or efficient options to extract themselves from overindebtedness through:

• the introduction of mandatory credit life insurance on all credit agreements of longer than six months but less than R50 000 in value to prevent lower income groups from falling into over-indebtedness due to changes in their financial circumstances.
• The Bill also aims to limit the wide-spread abuse of consumers by unscrupulous lenders and to allow for simpler and more rigorous enforcement of the Act by providing for criminal prosecution of lenders/credit grantors who contravene the Act.
• The Bill permits a person who, as at 24 November 2017, earns less than R7500.00 per month and can prove that they have not earned this amount in the preceding six months and who owe less than R50 000 in unsecured debt relating to credit agreements, to make an application to the National Credit Regulator for debt intervention.
• The Bill envisages that these obligations will be suspended for a period of maximum 24 months, to allow the consumer time to recover financially.
• If, despite all obligations being suspended for 24 months, the consumer can still not pay,
• the consumer must be given the same opportunity as is given to an insolvent consumer who does earn an income or has assets and can thus be sequestrated.
• The Bill accordingly envisages that these obligations are to be extinguished.

The Amendment Bill, should it pass and be assented to by the State President, is expected to have a significant impact on the lives of thousands of ordinary South Africans as well as large parts of the finance and banking sectors.