Business Report‘s Slindile Khanyile:

“Some consumers misunderstood the purpose of debt counselling, perceiving it to be the means to escape their repayment obligations, South Africa’s four major banks and the national credit regulator (NCR) said yesterday.

Three of the banks – Standard, First National and Nedbank – have received more than 14 500 applications from over-indebted customers who wanted the assistance of debt counsellors since the procedure was introduced last June. The NCR has had 8 031 applicants.

Most applicants stopped paying their debts after they were given the go-ahead by counsellors to seek counselling.

Mpho Thekiso, project manager for debt counselling at the NCR, conceded there was still a need for education on the objectives of the debt-relief process.

“Some debt counsellors do not disclose all the information to consumers upfront, which then makes people think that they have a payment holiday,” Thekiso said.

Read the full Business Report Article