1. A BRIEFING TO THE SELECT COMMITTEE ON TRADE AND INTERNATIONAL RELATIONS NCR STRATEGIC PLAN 2016/17 – 2020/21; 3 YEAR ANNUAL PERFOMANCE PLAN 2016/17 – 2018/19; PRESENTED BY NCR CEO, MS NOMSA MOTSHEGARE 6 APRIL 2016 NATIONAL CREDIT REGULATOR 1

2. OVERVIEW OF THE PRESENTATION  Government Priorities  Dti Priorities: Outcome 4  Legislative Mandate  Vision and Mission  NCR Programmes: Snapshot  State of the Credit Market  Stakeholder Management  Consumer Education  Investigations  Enforcement 2

3. MTSF 2014-2019 Targets: Increasing employment & reducing unemployment Increase share in h/hold income of the poorest of h/holds NDP aim: Eliminate poverty, reduce inequalities & unemployment GOVERNMENT PRIORITIES MTSF = Medium Term Strategic Framework h/holds = households 3

4. THE dti PRIORITY: OUTCOME 4 To achieve this national goal, the dti, plays a pivotal role in ensuring the achievement of Outcome 4. OUTCOME 4 Decent Employment through Inclusive Economic Growth. 4

5. LEGISLATIVE MANDATE OF THE NCR 5 To promote a fair & non-discriminatory marketplace for access to consumer credit: to provide for general regulation of consumer credit & improved standards of consumer information; To prohibit certain unfair credit and credit marketing practices; To promote responsible credit granting and use to prohibit reckless credit granting; To provide for debt re-organisation in cases of over-indebtedness; To regulate credit information; and To promote a consistent enforcement framework relating to consumer credit.

6. VISION & MISSION VISION  To promote a South African consumer credit market that is fair, transparent, accessible and dynamic. MISSION To support the social and economic advancement of South Africa, by:  regulating for a fair and non-discriminatory market for access to consumer credit; and  promoting responsible credit granting, use and effective redress. 6

7. To promote responsible credit granting. To protect consumers from abuse and unfair practices in the consumer credit market and address over-indebtedness. To enhance the quality and accuracy of credit bureau information To improve NCR’s operational effectiveness NCR PROGRAMMES: A SNAPSHOT To ensure effective implementation of the National Credit Amendment Act (NCAA). 7

8. 8 STATE OF THE CREDIT MARKET The total gross debtors book to date is R1.63 trillion. The total Rand value of new credit granted was R123.93 billion, with mortgages comprising R39.39 billion (31.78%). Unsecured Credit increased by 13.28% from R18.23 billion for the quarter ended September 2014 to R20.66 billion for the quarter ended September 2015. The total Payment Distribution Agents’ (PDA) distributions to credit providers from April 2015 to February 2016 was R6.1 billion.

9. 9 STAKEHOLDER MANAGEMENT The approach of the NCR towards stakeholder management is to facilitate open discussion and engagement with the industry and other stakeholders: The Credit Industry Forum ( CIF); Quarterly regulatory cluster meetings of the Council of Trade and Industry Institutions (Cotii); Other local regulators such as the South African Reserve Bank and the Financial Services Board, Competition Commission, etc.; Visits by Regulators from countries such as Swaziland, Namibia, Botswana, Uganda and Tanzania.

10. CONSUMER EDUCATION 10 Main NCR activities include: Joint project with the Department of Public Service and Administration (DPSA) which deals with campaigns to assist over-indebtedness of government employees such as teachers, nurses and the police. The “Know your credit status” campaigns jointly conducted with credit bureaus at shopping centres, offices of the dti, and the South African Revenue Services. Working jointly with local Tribal Authorities in rural areas of the Free State, Limpopo, Kwa-Zulu Natal, North West and Mpumalanga Provinces. We conducted outreach programmes (“Imbizos”) aimed at mainly pensioners to create awareness relating to undesirable practices of credit providers, especially retailers.

11. 11 INVESTIGATIONS The NCR conducted investigations regarding: The sale of retrenchment and occupational disability covers to pensioners and consumers receiving government social grants; Over-charging of credit life insurance; Reckless lending; Obtaining judgements in the incorrect jurisdiction; Overcharging of fees; Misleading advertisements.

12. 12 ENFORCEMENT Enforcement includes: 44 Referrals to the National Consumer Tribunal including cases of garnishee orders; R67million refunded to consumers in overcharged insurance products; Fines to the amount of R4.4million imposed on 9 credit providers; ID books, SASSA and Bank cards were seized. Several credit providers were arrested in raids conducted in the Western Cape.

13. 13 Programme 1: To promote responsible credit granting Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Improve compliance with affordability assessment regulations. Number of provinces visited to monitor compliance and appropriate enforcement action taken where necessary. 7 provinces visited to monitor credit provider compliance and appropriate enforcement action taken on non- compliant credit providers where necessary. 9 provinces visited OUTCOME 1: Reduced levels of over-indebtedness

14. 14 Programme 1: To promote responsible credit granting (cont) Output Performance Indicator/measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Increase compliance with regulations pertaining to the total cost of credit. Number of investigations conducted to enforce regulations and appropriate enforcement action taken where necessary. 15 Investigations conducted and appropriate enforcement action taken where necessary. Conduct 40 investigations Conduct 50 investigations Conduct 60 investigations OUTCOME 2: Affordable levels of credit promoted

15. 15 Programme 2: To protect consumers from abuse and unfair practices in the consumer credit market and address over-indebtedness. Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Conduct reckless lending investigations and appropriate enforcement action where necessary. Number of credit providers investigated and appropriate enforcement action taken where necessary. 40Credit providers investigated 60 credit providers investigated 7080 Improve awareness on misleading advertisements and honest disclosures by consumers on affordability tests Number of multimedia awareness campaigns (radio/ TV/interviews/ news print) Conducted on misleading advertisements -30 of any of the following: - Radio - TV - Interviews - News print On misleading advisements 3540 OUTCOME 3: Decrease levels of reckless lending practices

16. 16 Programme 3: To enhance the quality and accuracy of credit bureau information. Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Increase compliance by credit bureaus in respect of consumer credit information. Number of credit bureau investigated and appropriate enforcement action taken where necessary. 2 credit bureau investigated 3 credit bureau investigated 4 credit bureau5 credit bureau OUTCOME: Improved consumer credit information

17. 17 Programme 3: To enhance the quality and accuracy of credit bureau information (Cont). Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Increase compliance by credit bureaus in respect of consumer credit information. Number of credit bureaus audited Reports reviewed and appropriate corrective action taken where necessary. 14 credit bureaus Audited. All registered credit bureaus audited. All registered credit bureaus. All registered credit bureaus audited. OUTCOME: Improved consumer credit information

18. 18 Programme 4: To improve NCR’s operational effectiveness Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Improve operational efficiency through automated processes. % of uptime availability of the ICT (Registrations and Complaints) systems. 95% uptime of the ICT system. 96% uptime of the ICT system. 97% uptime of the ICT system. 98% uptime of the ICT system. Service Delivery Improvement Plan SDIP approved and implemented -SDIP 2016-2019 approved, implemented and report produced. Continue with implementation of SDIP. Identify new improvement area and develop the new SDIP for 2018/19- 2020/21 OUTCOME: Efficient service delivery

19. 19 Programme 5: To ensure effective implementation of the National Credit Amendment Act (NCAA) Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Improve awareness and compliance Number of workshops conducted with relevant stakeholders. 40 workshops with relevant Stakeholders 40 workshops with relevant stakeholders 45 workshops with relevant stakeholders 50 workshops with relevant stakeholders. Number of multimedia awareness campaigns (radio/ TV/interviews/ news print) Conducted on NCAA. 40 of any of the following: -Radio -TV -Interviews -News print and monitor compliance with the NCAA. 50 of any of the following: - Radio - TV - Interviews - News print. 55 of any of the following: - Radio - TV - Interviews - News print. 60 of any of the following: - Radio - TV - Interviews - News print. OUTCOME: Improved compliance with regulations and consumer protection

20. 20 Programme 5: To ensure effective implementation of the National Credit Amendment Act (NCAA) Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Improve awareness and Compliance. Number of outreach programmes and exhibitions (mall activations/ Outside Broadcast/ Roadshows/ Imbizos) conducted. 8 of any of the following activities: -Exhibitions -Mall activations -Outside Broadcast (OB) -Road shows and monitor compliance with the NCAA. 8 of any of the following: - Mall activations/ exhibitions/ OB/ Road shows/ Imbizos in peri urban and rural areas. 11 of any of the following: -Mall activations/ exhibitions/ OB/ Road shows/ Imbizos in peri urban and rural areas. 15 of any of the following: - Mall activations/ exhibitions/ OB/ Road shows/ Imbizos in peri urban and rural areas. OUTCOME: Improved compliance with regulations and consumer protection

21. 21 Programme 5: To ensure effective implementation of the National Credit Amendment Act (NCAA) Cont. Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2015/162016/172017/182018/19 Conduct special investigations and appropriate enforcement action taken where necessary Number of special investigations conducted and appropriate enforcement action taken where necessary. Conduct raids in Three (3)provinces and take appropriate enforcement action where necessary. Conduct special investigations: - Raids in four (4) provinces - Prescribed debt in 4 cities - Garnishee orders in 4 cities -Unregistered new entrants (credit providers, ADRs, PDAs) in 4 cities and take appropriate enforcement action where necessary. Same as in 2016/17 OUTCOME: Improved compliance with regulations and consumer protection

22. 22 BUDGET FOR THE 2016/17-2018/19

23. Thank You! www.ncr.org.za 23