The road to managed debt and financial freedom

Sibongile Mehlo (name changed) from Khayelitsha Site B said: “My income was not enough to support all my needs, that’s how I got into debt. When I get paid I know I only receive half of my salary. The rest the loans take from the account. When they are done, I am left with R750, and I still have to pay loan sharks from the community. After paying them, I am left with even less, and I am forced to go and borrow more money from the loan sharks.”

With little knowledge of how to manage their debt, people like Sibongile soon find themselves drowning in debt. They have no debt counselling and often find themselves having garnishee orders.

According to Free dictionary a garnishee order is defined as a legal procedure by which a creditor can collect what a debtor owes by reaching the debtor’s property when it is in the hands of someone other than the debtor, including their wages.

Unathi Jongihlathi, an intern journalist from the Herald, said, “Our parents in trying to give us better than what they had growing up, end up getting into debt because of our needs, because they want us to fit in.”

With laws and organisations such as the National Credit Act (NCA), National Debt Mediation Association (NDMA) and National Credit Regulator (NCR), it is possible for ordinary South Africans to be debt free. However, most don’t have access to such information.

The NCA requires the NCR to promote the development of an accessible credit market, particularly to address the needs of historically disadvantaged persons, low income persons, and remote, isolated or low density communities.

Lebogang Selibi, media relations officer from National Credit regulator ,said: “NCR conducts workshops across the country for different stakeholders such as tribal authorities, trade unions, NGOs etc. The NCR also partnered with the Department of Trade & Industry and the Congress of Traditional Leaders of South Africa (Contralesa) where we conducted workshops in different communities across the country educating consumers about their rights and obligations.”

The NCR also conducts investigations in remote places to check whether credit providers are complying with the National Credit Act (NCA) and to ascertain whether consumer rights are protected.

The NCR also conducts education through the media using television, radio (including community radio stations which reach the most remote places), and online and print media (including community newspapers).

The NCR approved the NDMA, a non-profit organisation established to provide debt mediation services in terms of the Credit Industry Code of Conduct to combat over indebtedness. The services include general debt management advice, complaints and debt mediation for consumers and their credit providers.

For more information visit: www.ncr.org.za