The sections of the National Credit Act of 2005, relevant to this matter, came into operation on 1 June 2007. The provisions of the Act relating to the so-called incidental credit agreements apply to debt-settlement arrangements entered into between a municipality and a consumer of municipal services. Thus, municipalities have to give full effect to the obligations which the Act imposes on creditors entering into what the Act refers to as "incidental credit agreements".
The SA Local Government Association, Salga, and the Department of Provincial and Local Government have analysed the provisions of the Act and have given consideration to the matters which the hon member is raising. Guidelines aimed at ensuring that municipalities deal with this matter in a uniform manner are being prepared. These guidelines are based on legal opinions which have been given and will deal extensively with all the practical implications. The guidelines will also deal with the impact which the Act will have on, amongst other things, the provision of free basic services by municipalities, as well as the implementation of municipal indigent and credit-control policies.
The first draft has already been considered by the executive committee of Salga. The guidelines will be made available to the relevant portfolio and select committees of Parliament once they have been finalised. I might just as well also mention that the public education division of the National Credit Regulator is already providing training to some municipalities to ensure that they implement the Act correctly.
Finally, discussions are currently under way to determine whether municipalities will have to be registered as credit providers. This matter will be finalised shortly. Thank you.