A leaflet which offers loans at 20% interest for the first two months and 25% thereafter to Sassa beneficiaries has been making the rounds in the Bishop Lavis area.
According to this leaflet, the credit provider requires an ID document, three months bank statements, two months payslip or Sassa statement as well as proof of address.
Manager for Registrations at National Credit Regulator (NCR), Zolile Mngqundaniso, confirmed that the credit provider is registered with their department as of September 2017 but they were not aware of the way they conduct business.
He says that the interest rate offered by this credit provider contravenes the National Credit Act.
Definitely the way they advertise and the interest rate they are charging is in contravention of the Act. The Act is specific and there are caps on the interest rate which is 5% per month and subsequent loan that follows is only 3% per month in that current calendar year.— Zolile Mngqundaniso, Manager for Registrations at NCR
Mngqundaniso says the matter will be referred to their investigation department to conduct a thorough investigation in the matter.
If indeed a contravention of the law is established, the matter will be passed on to the Tribunal who will then make a decision whether to de-register the entity.
All this probing should follow proper processes and the tribunal will make a decision whether the credit provider must refund all those consumers or completely close down.— Zolile Mngqundaniso, Manager for Registrations at NCR
To hear more of this interview, listen below: