Briefing by National Credit Regulator on its Annual Report 2015/16

1. Briefing by National Credit Regulator on its Annual Report 2015/16 Presentation to Select Committee on Trade and International Relations Presented by: Ms Nomsa Motshegare, NCR CEO Date: 8 March 2017

2. NCR Strategic Objectives 2015/16 • Legislative Amendments • Regular Engagements with Key Stakeholders • Key Successes 2015/16 • Annual Report: Performance Information Tables • Financial Information

3. To promote responsible credit granting: • Improve compliance with affordability assessment regulations. • Increase compliance with regulations pertaining to total cost of credit. • To protect consumers from abuse and unfair practices in the consumer credit market and address over-indebtedness: • Conducted reckless lending investigations & take appropriate enforcement action where necessary. • To enhance the quality and accuracy of credit bureau information. • Increase compliance by credit bureaus in respect of consumer credit information.

4. To monitor and improve NCR’s operational effectiveness: • Improve operational efficiency through automated processes. • To ensure effective implementation of the National Credit Amendment Act (NCAA). • Improve awareness and compliance.

5. LEGISLATIVE AMENDMENTS • President assented to the Act No. 19 of 2014/National Credit Amendment Act 2014: Most Regulations came into effect in March 2015; • Affordability Assessment Regulations introduced in September 2015; • Review of the limitation of fees and interest Regulations: May 2016; • Removal of Registration Thresholds: November 2016; • Registration of Payment Distribution Agencies & Alternative Dispute Resolution Agents: March 2015; • Regulations on Credit Life Insurance:  August 2016.

6. REGULAR ENGAGEMENTS WITH KEY STAKEHOLDERS • Community Outreach Programmes (Imbizos) with local Tribal Authorities: Jane Furse in Limpopo; Qwaqwa in F/State; Escort in KZN; Taung in N/West;Kwa-Mhlanga Tweefontein in Mpumalanga; George in W/Cape.  Imbizos targeted at pensioners and other social grant recipients: Mis-selling of credit insurance; • “Know your credit status” consumer awareness campaigns : NCR partnered with Credit Bureau Association & Credit Bureaus – conducted for employees of the dti, SARS, DPSA; • Credit Industry Forum comprising NCR, BASA, Micro Finance SA, debt counseling associations, payment distribution association, consumer representatives meet quarterly to address challenges wrt implementation of the Act; • Regular meetings with local regulators e.g. Financial Services Board, SARB and other dti regulatory agencies; • NCR hosted the African Consumer Protection Dialogue together with NCT & NCC: Collaboration on consumer protection issues & information sharing.

7. KEY SUCCESSES 2015/16 Investigations & Enforcement: • Referred 59 matters to the NCT: Banks, Retailer, Small credit providers, debt counselors; • Referrals of big retailers to the NCT e.g JDG Trading, Lewis Stores, Shoprite Checkers, Edcon; • Main alleged contraventions: Mis-selling of credit insurance: sale of retrenchment and disability cover + club fees to pensioners and social grant recipients; reckless lending; • Referrals of banks to the NCT: Finbond Mutual Bank, Standard Bank, Absa Bank, Nedbank, Capitec Bank; • Main alleged contravention: huge credit life insurance charges; the “699” vehicle scheme; reckless lending.

8. KEY SUCCESSES 2015/16 cont. Raids: • These were carried out in Western Cape (Bellville, Woodstock, Goodwood, Wynberg, Paarl, Stellenbosch, Strand, Somerset West) and Limpopo Province (Thohoyandou & Makhado); • Limpopo: 13 credit providers raided:  bank cards, pension cards, id books seized; arrests made and criminal cases opened; matters referred to NCT; • W/Cape: 21 credit providers raided: 5 arrests made, bank cards, identity books seized; criminal cases opened and matters referred to the NCT.

9. KEY SUCCESSES 2015/16 cont. • 2 Judgements handed down against two micro lenders: • Mayibuye Cash Loans registration cancelled and ordered to pay a fine of R500,000; • AkudleKutshiyele was ordered to pay a fine of R1million as an unregistered credit provider; • Contraventions: failure to conduct affordability assessment, overcharging consumers. • In total 24 Judgements handed down: 21 (87.5%) in favor of NCR and 3 (12.5%) in favor of respondents; • Total fines = R4.4 million; • Payment Distribution Agents distributed a total of R6.9 billion to credit providers; • Refunds  to consumers as a result of successful enforcement, complaints resolution and compliance monitoring are >R84 million.

10. KEY SUCCESSES 2015/16 cont. Education and Communication: • Conducted and participated in 360 workshops, 93 exhibitions, activations and roadshows and 100 stakeholder meetings aimed at educating consumers on the NCA as amended; • Conducted community outreach programmes in rural areas (imbizos) to educate pensioners and social grants recipients on their rights and responsibilities with a specific focus on credit insurance and illegal retention of ID books, SASSA, bank cards and pins by credit providers; • The NCR initiated the “Know Your Credit Status Campaign,” in partnership with the Credit Bureau Association (CBA); • NCR obtained an equivalent of R234million in media coverage.

11. Strategic objective1: to promote responsible credit granting

12. Strategic objective1: to promote responsible credit granting (cont.)

13. Strategic objective 2: to protect consumers from abuse and unfair practices in the consumer credit market and address over-indebtedness.

14. Strategic objective 3: to enhance the quality and accuracy of credit bureau information

15. Strategic objective 4: to monitor and improve NCR’s operational effectiveness

16. Strategic objective 5: to ensure effective implementation of the National Credit Amendment Act (NCAA).

17. Strategic objective 5: to ensure effective implementation of the National Credit Amendment Act (NCAA) (cont.)

18. FINANCIAL INFORMATION - ANNUAL REPORT 2015/16

19. Thank You! www.ncr.org.za