2 Board of Directors … Chair: Adv. P. Tlakula Deputy Chair: M Setiloane Designated Members S. Luka (Social Development) N. Mashiya (Finance) A. Osman (Housing) F. Sibanda (Trade and Industry) Other Members Y. Radinku C. Glover M. Maleka M. van Schalkwyk T. Store Committees (& chairpersons)  Remuneration committee (C. Glover)  Policy & strategy committee (Y. Radinku)  Audit & risk committee (T. Ramano) (independent)

3 Registration …  3,968 credit providers with 19, 574 branches were provisionally registered by 31 March  8 credit bureaux were fully registered  51 debt counsellors had submitted applications for registration (debt counselling sections became effective on 1 June 2007) Credit providers as at 31 March 2007 CategoryNumber Consumer debt ≥ R15 billion 6 Consumer debt ≥ R5 bn < R15 bn 11 Consumer debt ≥ R1 bn < R5 Billion 26 Consumer debt ≥ R100 million < R1 Bn 99 Consumer debt ≥ R5 m < R100 m 191 Consumer debt ≥ R1 m < R5 m 293 Consumer debt ≥ R1 m 3,342 Total as at 31 March 3,968

4 Consumer education & awareness … Creating a high level of awareness of specific consumer rights, prior to the effective date of relevant sections of the Act, would have been counter-productive We therefore focused on:-  incremental awareness on the general content of the Act;  cautionary messages in relation to over-indebtedness;  rights in respect of credit bureau information Consumer education & industry workshops  128 consumer education workshops  32 workshops and presentations on the Act to industry  37 ‘educational adverts’ were placed  185 articles on the Act in the print media  170 radio and 25 tv interviews

5 Credit Bureaux & credit information … Registration  8 registered, 3 rejected & withdrawn, 5 awaiting registration Consumers access to credit reports  60,000 free credit reports between Sept 2006 & March 2007  30,815 prescribed R20 S73 regulations – ‘data cleansing’  Regulations published 1 Dec 2006  Specified information had to be removed by 1 June 2007  Independent audit on each bureau by 31 August

6 Research & public information … Key findings on growth in credit extension:-  Household credit (by banks) increased by R391 billion over 4 years, i.e. 135% growth;  Bulk of this growth is mortgages, which grew by R270 billion over the period  Credit cards also grew considerably, but amounts relatively small … however, an important contributor to debt stress  Consumer credit extension grew faster than household consumption, GDP or growth in formal employment Important structural changes in the consumer credit market  Banks’ credit criteria becoming more inclusive  Credit card income thresholds lower, access to cheaper source of credit than micro loans or furniture finance for low income individuals  … but create new risks for debt stress (Consumer credit by banks, per FEASibility Report)

7 Training of Magistrates … Magistrates deal with approximately 65,000 debt related judgments p.m.  National Credit Act is a radical departure from the previous legislation: huge demands on the magistrates who have to interpret and apply it in the courts  Justice College developed a training manual & implemented a training programme for magistrates; expect 700+ magistrates to undergo training during 2007 Invaluable contribution to the successful implementation of the National Credit Act !

8 Debt Counselling … Huge effort in preparing for the implementation of debt counselling … but it remains the biggest challenge Initiatives :-  Training manual, training aids & 8 accredited training service providers = providing professional training in all parts of SA  Specialist support to registered debt counsellors  Debt counselling software + procedure manual, available free of charge for 6 months  Internet-based database on debt counselling cases  Proposals for changes to Magistrates Court Act & NCA to improve the consistency between Acts & address areas of concern “… effective implementation of debt counselling depends upon goodwill & co-operation of a number of stakeholders, including credit providers, credit bureaux & magistrate’s courts…” Case of over- indebtedness:- Mr. X, 27 year old, earning R8,450  Monthly commitments = R17,500  Living expenses R2,150.  2 mortgage bonds = R776,020 (7,948pm),  Vehicle finance = R182,579 (2,812pm),  2 credit cards = R13,965  6 retail accounts = R28,200.  Investment policy, & insurance = R1,357 pm.  4 further clothing accounts + cell phone Net income of R6,300, to cover monthly financial commitments of R17,500 = shortfall of R11,200. …living beyond his means = a case of reckless lending & irresponsible borrowing

9 Finance … Surplus of R141,981 for 10 mnts to 31 March’07  DTI transfers = 83% of income  Registration fees = 13% of income  Latter will increases significantly as registrations are finalised Unqualified audit opinion, certain issues as ‘emphasis of matter’

10 Human Resources … Employment Equity is a fundamental principle and our staff is representative of the community we serve. As at 31 March: 51 permanent employees, 8 contract employees, 10 vacancies; (56% of our staff female, 82% of the staff black South Africans, 30% of management team female, 60% black South Africans)

11 Developments since 1 June ? 1.S73: Credit bureaux data removal & audits 2.Debt Counsellors 3.Pre-agreement quotes translated, on web site 4.Investigations & monitoring of compliance 5.Impact of Act: Reduction in the volume of credit ? Increased declines, particular mortgages & motor vehicles ?

12 Thank You !