2
National Credit Regulator Annual Report 2015/2016
PART A: GENERAL INFORMATION
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
PART B: PERFORMANCE INFORMATION
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
04
17
TABLE OF CONTENTS
National Credit Regulator Annual Report 2015/2016
3
PART C: GOVERNANCE
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
PART D: HUMAN RESOURCE MANAGEMENT
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
PART E: FINANCIAL INFORMATION
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
ACKNOWLEDGEMENTS p114
63
75
55
4
National Credit Regulator Annual Report 2015/2016
GENERAL
INFORMATION
PART
A
1.1 NATIONAL CREDIT REGULATOR
GENERAL INFORMATION
Registered name
NCR (National Credit Regulator)
Registered office address
127 -15th Road
Randjespark
Midrand
1685
Postal address
P.O. Box 209
Halfway House
1685
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
www.ncr.org.za
External auditor’s information
Auditor-General of South Africa
300 Middel Street
New Muckleneuk
Pretoria
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
1.2 LIST OF ACRONYMS
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
screen.
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
uncertainty.
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.
1.3 MINISTER’S FOREWORD
Dr Rob Davies, MP
Minister of Trade and Industry
National Credit Regulator Annual Report 2015/2016
7
Consumer education
Consumers are key stakeholders in th
