National loans register starts
The National Loans Register was officially launched by the Micro-lending Finance Regulatory Council (MFRC) this week.
The register, which contains details of loans extended to consumers by micro-lenders, is expected to go a long way in curbing the cycle of indebtedness in which many South Africans find themselves.
The MFRC presented certificates to the micro-lenders already participating in the register.To date about 60 percent of the 1 300 MFRC-registered micro-lenders are on the national loans register, including the biggest micro-lender, African Bank. Saambou Bank, the second biggest lender, is not yet participating, but is adapting its systems to do so.
The success of the loan register depends on lenders submitting all their information to the register, and on them using the register to check how much debt a consumer has before granting a loan.
Gabriel Davel, the chief executive of the MFRC, says the rules of the MFRC, with which all MFRC-registered micro-lenders must abide, as well as the Usury Act Exemption Notice - the legislation which allows micro-lenders to operate outside of the requirements of the Usury Act - are being amended to make it compulsory for micro-lenders to use the national loans register.
Information from the national loans register will be shared with the databases of the two largest credit bureaus in the country, Information Trust Corporation and Experian, to give lenders a wider picture of the financial commitments of consumers.
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