Mashonisas to be legally registered

In a country with many citizens surviving from hand to mouth and reliant on informal lenders called mashonisas to make ends meet, the Department of Trade and Industry promulgated the National Credit Regulator (NCR) to provide regulatory frameworks for citizens’ relief from debt.

These regulations are to prevent the abuse of borrowers by mashonisas who are known to charge exorbitant interest rates over short repayment periods, and sometimes confiscating borrowers’ national identity documents or assaulting those who default.

The regulations have now been strengthened and from 11 May this year, NCR determined a new threshold for which a credit provider is required to be registered with the NCR in terms of the National Credit Act.

In a statement, the NCR’s Nthupang Magolego said the previous threshold compelled lenders to register only if the value of their credit agreements amounted to R500 000 or if that person or entity concluded 100 credit agreements. Magolego said this had been repealed and now, any person or entity involved in credit lending is required to register, irrespective of the number of agreements or the value of the principal debt.

She advised consumers to, forthwith, only obtain credit from duly registered entities, as doing so would advance consumers’ rights. She urged those in doubt of the registration status of any lending entity to contact the NCR for verification.

Also, she said lenders were required, by law, to renew their registration annually and the new regulation made provision for the NCR to charge penalty fees for late renewals.

The amended regulations are available on the NCR’s website, www.ncr.org.za