The National Credit Regulator (NCR) has urged credit providers to continue asking for pay slips or bank statements of formally employed consumers to finalise affordability assessments.
The NCR published draft guidelines in response to a court ruling in March that consumers did not have to produce proof of income to access credit.
Lesiba Mashaba, the NCR company secretary, says the regulator chose not to appeal but instead published draft regulations to address the deficiencies of the judgment.
Mashaba says that guidelines are needed to determine a consumers gross income and discretionary income.
He explains that credit providers will still need to somehow calculate the gross income the consumer to determine a consumer's living expenses.
The NCR wants credit providers to submit their assessment models for those who do not work in the formal sector.
Mashaba says some parts of the regulations have become impractical to implement following the judgment.
The problem with this judgment is that it removed the requirements for consumers that were formally employed and can produce the payslips and bank statements.— Lesiba Mashaba, NCR company secretary
The other problem is that parts of the regulations require credit providers to calculate consumers discretionary income.— Lesiba Mashaba, NCR company secretary
What we have done on the guideline is to be flexible for consumers who are in the informal sector of the economy. We leave it up to credit providers to decide how they will verify income and make that assessment.— Lesiba Mashaba, NCR company secretary
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