BY : OBED TONGOANE, CHIEF OPERATIONS OFFICER 13 AUGUST PRESENTATION ON DEBT COUNSELLING IN SOUTH AFRICA

CONTENT 1.The purpose of the Act 2.Debt Counselling: A mechanism for over-indebtedness 3.Registration of debt counsellors 4.Debt Counselling Statistics 5.Support and Promotion of Debt Counselling 6.Challenges 7.Proposed solutions 2

THE PURPOSE OF THE ACT The purpose of the National Credit Act is, amongst others, to protect consumers by:- a)Promoting responsibility in the credit market by- (i) encouraging responsible borrowing, avoidance of over-indebtedness and fulfillment of financial obligations by consumers (ii) discouraging reckless credit granting by credit providers and contractual default by consumers  Addressing and preventing over-indebtedness of consumers and providing mechanisms for resolving over-indebtedness based on the principle of satisfaction by the consumer of all responsible financial obligations 3

DEBT COUNSELLING: A MECHANISM FOR OVER-INDEBTEDNESS  The National Credit Regulator is requited to register credit providers, credit bureaux, and debt counsellors  Main role of a debt counsellor is to assist over-indebted consumers 4

REGISTRATION OF DEBT COUNSELLORS  Only natural persons may be register as debt counsellors  Must have grade 12/Matric certificate  Two (2) years relevant experience in business environment, legal, counselling, complaints handling  Have completed a debt counselling course  Have ability to manage own financial affairs  No criminal records 5

Total no. of registered debt counsellors as at end July 2013 is 2013 Geographic Location Profession Race Gender …..142 …..74 … …..222 …..46 …..67 …..79 …..14 …..359 … REGISTRATION OF DEBT COUNSELLORS cont. E/Cape142 Free State74 Gauteng1010 KZN222 Limpopo46 Mpumalan ga 67 North West79 N/Cape14 W/Cape359 Total2013 Accountant277 Administrator609 Consultant149 Debt counsellor64 Educator/Couns ellor 135 Financial Consultant 75 Legal/paralegal319 Medical9 Sales/Marketing91 Self employed285 Total2013 African438 Coloured67 Indian128 White1380 Total2013 Female968 Male1045 Total2013

DEBT COUNSELLING STATISTICS  Since inception to June 2013, consumers applied for debt counselling.  consumers applied for debt counselling during 2012/13 financial year.  An average of 9100 consumers apply for debt counselling per month.  PDA’s distributed R2.96 billion to credit providers in 2012/13  Since inception R10.6 billion has been distributed to credit providers

 573 monitoring conducted in 2012/13  Objective is to monitor compliance with the Act, condition of registration, NCR guidelines provide guidance and support  Six (6) provincial debt counselling workshops: were conducted in Limpopo, Free State, Eastern Cape, North west, Gauteng and Kwa-Zulu Natal.  Meetings with Law Societies to assist where possible with free legal services  Workshops for magistrates are ongoing.  Circulars and public notices are issued on a regular basis to provide guidance and advise to the industry and consumers  Debt counselling awareness campaigns – targeting government employees were held with Mpumalanga Department of Education, Kwa-Zulu Natal Department of Finance, North west Department of Economic and Development Affairs.  Roll outs to other government departments underway. SUPPORT AND PROMOTION OF DEBT COUNSELLING

CHALLENGES  Court processes: no uniform views by magistrates  Credit providers terminating despite court orders being in place  Legal fees  Cooperation between credit providers and debt counsellors 9

PROPOSED SOLUTIONS  Workshops with Magistrates  This is being addressed by the current Bill amending the NCA  Engagements with Law Societies to assist where possible  Stakeholder engagements and possible conditions of registration compelling cooperation 10

Thank You