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National Credit Regulator Annual Report 20152016 2 · PDF file National Credit Regulator Annual Report 20152016 PART A: GENERAL INFORMATION 1.1 NCR General Information p4 1.2 List

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  • 2 National Credit Regulator Annual Report 2015/2016


    1.1 NCR General Information p4

    1.2 List of Acronyms p5

    1.3 Minister’s Foreword p6

    1.4 Statement by the Accounting Authority p8

    1.5 Chief Executive Officer’s Overview p10

    1.6 Statement of responsibility and confirmation of the accuracy of the Annual Report p12

    1.7 Strategic overview p13

    o Mission p13

    o Vision p13

    o Values p13

    1.8 Legislative and Other Mandates p14

    1.9 Organisational Structure p15


    2.1. Auditor-General’s Report: Predetermined Objectives p17

    2.2 Situational Analysis p17

    o Service delivery environment p17

    o Organisational environment p18

    o Key policy development and legislative changes p18

    2.3 Strategic outcome-orientated Goals p18

    2.4 Performance Information by Activity p18

    • Performance Area: Registrations p18

    • Performance Area: Compliance p22

    • Performance Area: Education and Communication p26

    • Performance Area: Complaints p30

    • Performance Area: Investigations and Enforcement p32

    • Performance Area: Debt Counselling p38

    • Performance Area: Statistics p42

    2.5 Performance information by programme p46

    o Programme 1 p46

    o Programme 2 p48

    o Programme 3 p49

    o Programme 4 p50

    o Programme 5 p51

    • Linking performance with budgets p52

    • Revenue collection p53

    • Capital investment p53




  • National Credit Regulator Annual Report 2015/2016



    3.1 Introduction p55

    o Portfolio Committees p55

    o Executive Authority p56

    o Accounting Authority p56

    o Audit and Risk Management Committee p56

    3.2 Internal Audit and Audit and Risk Management Committee p56

    3.3 CompIiance with Laws and Regulations p57

    3.4 Fraud and Corruption p57

    3.5 Minimising Conflict of Interest p57

    3.6 Code of Conduct p58

    3.7 Health, Safety and Environmental Issues p58

    3.8 Social Responsibility p58

    3.9 Audit and Risk Management Committee p58


    4.1 Introduction p63

    o HR priorities during the period p63

    o Strategies to attract and retain employees p65

    o Performance Management System p65

    o Development initiatives p65

    o Learner testimonials p66

    o Governance Training p68

    o Employee Wellness Programme p68

    o Social Activities p68

    o Sound labour and employee relations p69

    o Challenges p69

    o Future HR plans p69

    4.2 Human Resource Oversight Statistics p70

    o Personnel cost by programme p70

    o Personnel cost by salary band p70

    o Performance rewards p70

    o Training cost p71

    o Employment and vacancies p71

    o Employment changes p72

    o Reasons for staff leaving p72

    o Labour relations: misconduct and disciplinary action p72

    o Equity and Employment Equity status p73


    General Information p75

    5 Report of the Chief Financial Officer p76

    5.1 Report of the Auditor-General p77

    5.2 Annual Financial Statements p81





  • 4 National Credit Regulator Annual Report 2015/2016





    Registered name NCR (National Credit Regulator)

    Registered office address 127 -15th Road




    Postal address P.O. Box 209

    Halfway House


    Contact telephone number Switchboard: 011 554 2700

    Toll Share:

    0860 627 627

    0860 NCR NCR

    Email address Complaints or enquiries: [email protected]

    Debt counselling complaints: [email protected]

    General information/queries: [email protected]

    Website address

    External auditor’s information Auditor-General of South Africa

    300 Middel Street

    New Muckleneuk


    Editing and Distribution NCR’s Education and Communication Department

    4 National Credit Regulator Annual Report 2015/2016

  • National Credit Regulator Annual Report 2015/2016

    5 National Credit Regulator Annual Report 2015/2016


    AA Accounting Authority

    ACPD African Consumer Protection Dialogue

    ADR Alternative Dispute Resolution

    AGSA Auditor-General of South Africa

    BASA Banking Association of South Africa

    BBBEE Broad-Based Black Economic Empowerment

    CBA Credit Bureau Association

    CBM Credit Bureau Monitor

    CCMR Consumer Credit Market Report

    CEO Chief Executive Officer

    CFO Chief Financial Officer

    CIF Credit Industry Forum

    dti Department of Trade and Industry

    DPSA Department of Public Service and Administration

    EE Employment Equity

    EXCO Executive Committee

    GRAP Generally Recognised Accounting Practice

    MFSA Microfinance South Africa

    NCA National Credit Act

    NCAA National Credit Amendment Act

    NCC National Consumer Commission

    NCR National Credit Regulator

    NCT National Consumer Tribunal

    NDP National Development Plan

    PDA Payment Distribution Agent

    PFMA Public Finance Management Act

    SCM Supply Chain Management

  • 6 National Credit Regulator Annual Report 2015/2016

    The NCA as Amended

    Government is very concerned about the high-levels of

    consumer over-indebtedness. Amendments to the National

    Credit Act were devised to afford consumers far greater

    protection. Most of the regulations pertaining to the National

    Credit Act as amended came into effect on 13 March 2015. The

    NCR has done a sterling job educating consumers, monitoring

    compliance with these regulations, and enforcing the NCA.

    The Affordability Assessment Regulations introduced in

    September 2015 make it compulsory for credit providers

    to standardise the process to be followed when assessing

    whether consumers can afford a loan. Strict adherence

    to the regulations, which require a rigorous assessment

    of discretionary income, proper validation of income and

    expenses, should help eliminate reckless lending practices. It

    is also imperative for consumers to disclose accurately to the

    credit provider all their financial obligations. Failure to do so

    may result in consumers losing the protection offered by the

    NCA. In the current economic environment, it is critical for the

    NCR to continue monitoring and enforcing these regulations

    to ensure that credit providers are not tempted to compromise

    the process when granting credit.

    The review of the limitation of fees and interest rates Regulations

    that were published on 6th November 2015 make provision to

    marginally increase initiation and monthly service fees, lower

    the maximum interest rate caps, especially for unsecured and

    short-term loans; this is welcome in the current economic

    environment and should go some way towards helping cash-

    strapped consumers repay their debt.

    The final Regulations pertaining to the maximum caps on credit

    life insurance are to be published in the new-year; this will curb

    the abuses of credit life insurance in terms of premium charges.

    Once the revised registration thresholds have been published,

    everyone who provides credit will be required to register; this

    includes the very small credit providers that previously fell

    outside the thresholds and, therefore, outside the NCR’s radar


    In addition, Payment Distribution Agents and Alternative

    Dispute Resolution Agents are now required to register with

    the NCR.

    The NCR plays a critical role in regulating the credit market,

    educating consumers and ensuring that consumer rights are

    protected. The financial year 2015/2016 was a very challenging

    year for consumers globally. Consumers locally had to contend

    with a sluggish economy, currency volatility, rising interest rates,

    drought, inflation, increases in water and electricity rates and job


    During the past financial year, the total outstanding consumer

    credit balances (or gross debtors’ book) increased year-on-year

    by 2.94% (as at 31 March 2016) to R1.66 trillion. The increase

    in the size of the credit market means that there are millions of

    consumers in South Africa that are very vulnerable in the current

    low growth environment. Unfortunately prospects for economic

    growth, globally and locally are bleak in the short-term. As a

    result, I expect demand for the NCR’s services to increase.


    Dr Rob Davies, MP Minister of Trade and Industry

  • National Credit Regulator Annual Report 2015/2016


    Consumer education

    Consumers are key stakeholders in th

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