Hon Chairperson, hon Minister, hon Members of the Council, guests in the gallery, I want to say this to hon Mnguni: Even though you are sitting next to the man who replaced our woman, please keep on doing the job; we also need him in the ANC. [Laughter.]
Hon Chairperson, one of the distinguishing characteristics of the ANC-led government is its caring for the vulnerable people of our society. Our government is determined to eradicate poverty. It is beyond contention that poverty eradication attempts would prove vacuous and hollow if we did not secure the most vulnerable people from debt entrapment.
It is a historical fact that the apartheid dispensation and its economy were driven, in the main, by rural underdevelopment and racial economic exclusion. Rural areas were deemed to be labour reserves from which the able-bodied were transported in droves to urban areas as cheap labour and exploited until they were of no use to the exploitative industrial bosses, either because of sickness or old age.
Upon the depletion of their strength, they would be returned to the rural areas in a state of unconscionable poverty to be cared for by their struggling families.
It is thus common cause that the rural areas remain the most underdeveloped and economically marginalised in our country. The reversal of the legacies of poverty, unemployment and income inequality - I call them the three devils - has to be targeted, in the main, in rural areas. It is the rural poor who find themselves irreversibly indebted and thus rural economies remain underdeveloped.
Many credit providers continue to extend expensive credit to poor people in the rural areas without conducting proper affordability tests. As a result many poor people become increasingly overindebted and have impaired credit records. The impairment of credit records deepens the crisis our people find themselves in, as they not only lose access to credit but also to employment.
We welcome the provision in the Bill that allows for the automatic removal of adverse credit information upon the consumer repaying the owed debt to the creditors. It is the direct opposite of the current situation in which payment of debt does not offer automatic removal from the adverse credit information record.
In other words, even though a consumer may have paid all his or her debt, they continue to be barred from free participation in the country's commerce. Surely the current situation is not only harsh, but for all intents and purposes it is also unreasonable and cannot be justified in a caring society, underpinned by the spirit of ubuntu.
It is fallacious to assume that equality before the law, guaranteed by section 9(1) of our Constitution, translates into the consumer being on an equal footing with credit providers. Many of our people who procure credit do so under the pressure to relieve immediate needs and thus find themselves falling prey to unscrupulous and at times unauthorised credit providers.
We therefore welcome the strengthening of the powers of the National Credit Regulator to ensure more efficient regulation of the industry. In the same way, we welcome the enhanced ways of dealing with reckless lending and the penalties that will be handed down to offenders.
Rural economic development is often slowed down by the lack of capacity of the rural consumer to participate in the economy. As I have mentioned above, the listing of poor people and unemployed people in adverse credit records not only prevents them from accessing credit but impedes them from eligibility for employment. It is a vicious cycle of underdevelopment that feeds on itself to the detriment of the poor.
Therefore, the powers that are being vested in the National Consumer Tribunal to declare a credit agreement reckless will protect the vulnerable people of our society from increasing poverty. In this regard, rural economies will also be strengthened by the more enhanced buying power of its general population as the majority will be employable and brought into the centre of economic activity.
The rule of law requires that creditors institute action in view of collecting debts against debtors within a given timeframe. By law, if a debt is not collected within a given period of time, such debt is extinguished by prescription. However, many credit providers have conducted, and continue to conduct, the business of selling prescribed debt and thus burdening the consumer with exorbitant repayment amounts as the debt-collecting agents add their own charges, compounded with interest accumulated on the principal debt over the years.
Many poor people continue to lose their assets and fall deeper and deeper into poverty because of such unconscionable activities. We therefore welcome the prohibition of sale of prescribed debt, which ensures that the law is upheld. This has the effect that prescription of the debt owed releases the consumer from the payment of such debt. In conclusion, our role as representatives of the people is not only to ensure economic growth through supporting our government to create favourable conditions for commerce and foreign direct investment. Our mandate must fundamentally be informed by the purposive interpretation of our Constitution of creating an equal society in which fundamental human rights are protected and freedom for all is advanced.
We are therefore enjoined to protect the vulnerable in our society. Perhaps it is time that we also re-examine our jurisprudence or legal philosophy as well as our common law in relation to how they treat poor and vulnerable people.
Perhaps our approach must not be informed so much by the need to protect those who do business by ensuring ease of collecting the return on their investments, even at the expense of the human dignity of those who enter into agreements with them in good faith. It is high time that our history of underdevelopment and economic exclusion directs how the poor people are treated by the law.
We support this Bill because it restores the dignity of the poor and marginalised people. It is a Bill that will enhance the economic activity of rural economies by removing the stranglehold of adverse listings on poor people.
This is a Bill that will ensure that those who seek to ensnare and entrap the rural poor in a web of debt are penalised. It is a Bill that will limit the propensity of a number of credit providers to engage in reckless lending.
Indeed, for the first time, we move South Africa forwards to a future in which payment of one's debts will result in automatic removal from bad- record listings and the freedom to engage in commerce. This amnesty means more to poor people in general and to the rural poor in particular. Thank you. [Applause.]