1. A BRIEFING TO THE SELECT COMMITTEE ON TRADE AND INTERNATIONAL RELATIONS: NCR STRATEGIC PLAN 2015/16 – 2019/20 & 3 YEAR ANNUAL PERFOMANCE PLAN 2015/16 – 2017/18 PRESENTED BY NCR CEO, MS NOMSA MOTSHEGARE 10 June 2015 NATIONAL CREDIT REGULATOR 1

2.  It is established in terms of the section 12 of the National Credit Act (NCA).  Its main purpose is to regulate consumer credit, monitor compliance and enforce the NCA.  The National Credit Amendment Act (NCAA): assented to and signed by the President on 19 May 2014; Regulation published on 13 March 2015 MANDATE OF THE NCR 2

3. OVERVIEW OF THE PRESENTAION  Vision and Mission  NCR Programmes: Snapshot  Government Priorities  Dti Priorities: outcome 4  Programmes 1-5  3 Year annual performance plan 2015-2018  Budget: 2015/16 – 2019/20  Possible challenges for programmes 1-5  Remedies for challenges to programmes 1-5 3

4. 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. 4

5. 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).

6. 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

7. 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.

8. PROGRAMMES 8 PROGRAMSDTINCR Program 1Facilitate broad-based economic participation through targeted interventions to achieve more inclusive economic growth To promote responsible credit granting Program 2Create a fair regulatory environment that enables investment, trade and enterprise development in an equitable and socially responsible manner  To protect consumers from abuse and unfair practises in the consumer credit market and address over- indebtedness.  To ensure effective implementation of the NCAA.

9. PROGRAMMES CONTINUED 9 PROGRAMSDTINCR Program 3Facilitate broad-based economic participation through targeted intervention to achieve more inclusive economic growth To enhance the quality and accuracy of credit bureau information Program 4Promote a professional, ethical, dynamic, competitive and customer- focused work environment that ensures effective and efficient service delivery To promote NCR’s operational effectiveness Program 5Promote a professional, ethical, dynamic, competitive and customer- focused work environment that ensures effective and efficient service delivery To ensure effective implementation of the NCAA

10. Programme 1: To promote responsible credit granting. Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Reduced levels of over-indebtedness. Improve compliance with affordability assessment regulations. Number of workshops conducted on affordability assessment regulations and appropriate enforcement action taken where necessary. 1 workshop 9 workshops conducted on affordability assessment regulations. 9 provinces visited to monitor credit provider compliance and appropriate enforcement action taken on non-compliant credit providers where necessary 9 provinces visited to monitor credit provider compliance and appropriate enforcement action taken on non-compliant credit providers where necessary. 3 YEAR ANNUAL PERFOMANCE PLAN 10

11. Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Reduced levels of over- indebtedness. Improve compliance with affordability assessment regulations. Number of provinces visited to monitor compliance and appropriate enforcement action takenwhere necessary. Budget R6.6m 9 provinces visited to monitor credit provider compliance and appropriate enforcement action taken on non-compliant credit providers where necessary R7.0m R7.6mR8.4m 3 YEAR ANNUAL PERFOMANCE PLAN Programme 1: To promote responsible credit granting 11

12. Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Affordable levels of credit promoted. 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 Budget Conduct a study to review the current levels of the total cost of credit. R10.4m Conduct 10 investigations and appropriate enforcement action taken where necessary. R11.1m Conduct 15 investigations and appropriate enforcement action taken where necessary. R12m Conduct 18 investigations and appropriate enforcement action taken where necessary R12.8m Programme 1: To promote responsible credit granting 3 YEAR ANNUAL PERFOMANCE PLAN 12

13. Quarterly Milestones for Programme 1 Goal/ Outcome Output Performance Indicator/ measure Baseline 2015/16 Annual Target Quarterly Milestones 1st Quarter2nd Quarter3rd Quarter4th Quarter Reduced levels of over- indebtedness Improve compliance with affordability assessment regulations. Number of workshops conducted on affordability assessment regulations and appropriate enforcement action taken where necessary. Number of provinces visited to monitor compliance and appropriate enforcement action takenwhere necessary. -9 workshops conducted on affordability assessment regulations. 1332 -9 provinces visited to monitor credit providers and appropriate enforcement action takenwhere necessary. Budget 1332 R0.7mR1.8mR2.7mR1.8m 13

14. Quarterly Milestones for Programme 1 Goal/ Outcome Output Performance Indicator/ measure Baseline 2015/16 Annual Target Quarterly Milestones 1st Quarter2nd Quarter3rd Quarter4th Quarter Affordablelevels of credit promoted. Increasecom pliance withregulatio ns pertaining to the total cost of credit Number of investigations conducted and appropriate enforcement action takenwhere necessary. Study conducted to review the current levels of the cost of credit and recommendat ions to the dti. Budget Conduct 10 investigations Andappro- priate enforcement action taken where necessary. 2332 R11.1mR2.3mR3.25m R2.3m 14

15. 3 YEAR ANNUAL PERFOMANCE PLAN Goal/ OutcomeOutput Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Decreased levels of reckless lending practices. Conduct reckless lending investigations and appropriate enforcement action where necessary. Number of credit providers investigated and appropriate enforcement action taken where necessary. Budget 15 Compliance notices/ compliance certificates where necessary. R29m 20 credit providers investigated and appropriate enforcement action taken where necessary. R30.4m 25 R32.9m 30 R35.6m Programme 2: To protect consumers from abuse and unfair practices in the consumer credit market and address over-indebtedness. 15

16. Quarterly Milestones for Programme 2 Goal/ OutcomeOutput Performance Indicator/ measure Baseline 2015/16 Annual Target Quarterly Milestones 1 st Quarter 2 nd Quarter3 rd Quarter4 th Quarter Decreased levels of reckless lending practices. Conduct reckless lending investigations and appropriate enforcement action where necessary. Number of credit providers investigated and appropriate enforcement action taken where necessary. 15 Compliance notices issued and compliance certificate where necessary. Budget 20 credit providers investigated and appropriate enforcement action taken where necessary. 4655 R30.4mR5.9mR9.7mR7.4m 16

17. 3 YEAR ANNUAL PERFOMANCE PLAN Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Improved consumer credit information. Increase compliance by credit bureaus in respect of consumer credit information. Number of credit bureau investigated and appropriate enforcement action taken where necessary. Budget 2 credit bureau investigated and appropriate enforcement action taken where necessary. 2 credit bureau investigated and appropriate enforcement action taken where necessary. 2 credit bureau investigated and appropriate enforcement action taken where necessary. 2 credit bureau investigated and appropriate enforcement action taken where necessary. R14mR16mR17mR18.5m Programme 3: To enhance the quality and accuracy of credit bureau information 17

18. 3 YEAR ANNUAL PERFOMANCE PLAN Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Number of credit bureau audited Reports reviewed and appropriate enforcement action taken where necessary. Budget 14 credit bureau audited reports reviewed. 14 credit bureau audited reports reviewed and appropriate enforcement action taken where necessary. 14 credit bureau audited reports reviewed and appropriate enforcement action taken where necessary. 14 credit bureau audited reports reviewed and appropriate enforcement action taken where necessary. R10.3mR11.5mR12.3m R9.6m 18

19. Quarterly Milestones for Programme 3 Goal/ Outcome Output Performance Indicator / measure Baseline 2015/16 Annual Target Quarterly Milestones 1st Quarter2nd Quarter3rd Quarter4th Quarter Improved consumer credit information. Increase compliance by credit bureaus in respect of consumer credit information. Number of credit bureaus investigated and appropriate enforcement action taken where necessary. 2 credit bureaus investigated and appropriate enforcement action taken where necessary. Budget 2 credit bureaus investigated and appropriate enforcement action taken where necessary. Draft Terms of Reference. Appoint Service provider and commence investigation. Continue with investigation and finalise. Take appropriate enforcement action where necessary. R16mR0.500mR2mR9mR4.5m Number of credit bureau audited reports reviewed and appropriate enforcement action taken where necessary. 14 credit bureau audited reports reviewed. Budget 14 credit bureau audited reports reviewed and appropriate enforcement action taken where necessary Review auditors reports from credit bureaus. Take appropriate enforcement action where necessary in terms of the audit reports. Continue to take appropriate enforcement action where necessary. Continue to take appropriate enforcement action where necessary. R10.3mR1.5mR3.15m R2.5m 19

20. 3 YEAR ANNUAL PERFOMANCE PLAN Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Efficient service delivery. Improve operational efficiency through automated processes. % of uptime availability of the IT system. Budget Implementation of recommendations of the ICT assessment. 95% uptime of the IT system. 96% uptime of the IT system. 97% uptime of the IT system. R44.1mR42.8mR46.3mR50.1m Programme 4: To improve NCR’s operational effectiveness 20

21. Quarterly Milestones for Programme 4 Goal/ Outcome Output Performance Indicator / measure Baseline 2015/16 Annual Target Quarterly Milestones 1st Quarter2nd Quarter 3rd Quarter 4th Quarter Efficient service delivery. Improve operational efficiency through automated systems % of uptime availability of the IT system Implementat ion of recommenda tions of the ICT assessment 95% uptime of the IT system. BudgetR42.8mR9.8mR10mR10.9mR12.1m 21

22. 3 YEAR ANNUAL PERFOMANCE PLAN Programme 5: To ensure effective implementation of the National Credit Amendment Act (NCAA) Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Improved compliance with regulations and consumer protection Improve awareness and compliance Number of workshops conducted with relevant stakeholders. Budget 30 workshops with relevant stakeholders and monitor compliance with the NCAA. R9.3m 40 workshops with relevant stakeholders R10m 45 workshops with relevant stakeholders R10.8m 50 workshops with relevant stakeholders. R11.2m Number of multimedia awareness campaigns (radio/ TV/interviews/ news print) conducted. Budget 18 of any of the following: -Radio -TV -Interviews -News print and monitor compliance with the NCAA. R2.3m 30 of any of the following: - Radio - TV - Interviews - News print R2m 30 of any of the following: - Radio - TV - Interviews - News print R2.1m 30 of any of the following: - Radio - TV - Interviews - News print R2.5m 22

23. Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Improved compliance with regulations and consumer protection Improve awareness and compliance Number of outreach programmes and exhibitions (mall activations/ Outside Broadcast/ Roadshows/ Imbizos) conducted. Budget 5 of any of the following activities: -Exhibitions -Mall activations -Outside Broadcast (OB) -Road shows and monitor compliance with the NCAA. R1.6m 8 of any of the following: - Mall activations/ exhibitions/ OB/ Road shows/ Imbizos in peri urban and rural areas. R1.55m 11 of any of the following: -Mall activations/ exhibitions/ OB/ Road shows/ Imbizos in peri urban and rural areas. R1.75m 15 of any of the following: - Mall activations/ exhibitions/ OB/ Road shows/ Imbizos in peri urban and rural areas. R2m 3 YEAR ANNUAL PERFOMANCE PLAN Programme 5: To ensure effective implementation of the National Credit Amendment Act (NCAA ) 23

24. Goal/ Outcome Output Performance Indicator/ measure Estimate Performance Medium Term Targets 2014/152015/162016/172017/18 Improved compliance with regulations and consumer protection Conduct special investigations and appropriate enforcement action taken where necessary Number of raids conducted and appropriate enforcement action taken where necessary Budget Conduct 2 raids in one province and take appropriate enforcement action where necessary. Conduct raids in three (3) provinces and take appropriate enforcement action where necessary Conduct raids in four (4) provinces and take appropriate enforcement action taken where necessary Conduct raids in four (4) provinces and take appropriate enforcement action taken where necessary. R1.6mR1.55mR1.75mR2m 3 YEAR ANNUAL PERFOMANCE PLAN Programme 5: To ensure effective implementation of the National Credit Amendment Act (NCAA) 24

25. Quarterly Milestones for Programme 5 Goal/ Outcome Output Performance Indicator / measure Baseline 2015/16 Annual Target Quarterly Milestones 1st Quarter2nd Quarter3rd Quarter4th Quarter Improved compliance with regulations and consumer protection Improve awareness and compliance Number of outreach programmes and exhibitions (mall activations/ Outside Broadcast/ Road shows/ Imbizos) conducted. 5 of any of the following activities with special focus on peri urban and rural areas: -Exhibitions -Mall activations -Outside Broadcast (OB) -Road shows Imbizos and monitor compliance with the NCAA. Budget 8 of any of the following: -Mall activations -Exhibitions/ -OB/ Road shows/ Imbizos in peri urban and rural areas. R1.55m 2 R0.225m 2 R0.550m 2 R0.225m 2 R0.550m 25

26. Goal/ Outcome Output Performance Indicator / measure Baseline 2015/16 Annual Target Quarterly Milestones 1st Quarter2nd Quarter 3rd Quarter4th Quarter Improved compliance with regulations and consumer protection Conduct special investigation s and take appropriate enforcement action where necessary. Number of raids conducted and appropriate enforcement actions taken where necessary. Conduct 2 raids in one province and take appropriate enforcement action where necessary. Budget Conduct raids in three (3) provinces and take appropriate enforcement action where necessary Planning and information gathering. Conduct 1 raid in one province and appropriate enforcement action taken where necessary Conduct 1 raid in one province and appropriate enforcement action taken where necessary Conduct 1 raid in one province and appropriate enforcement action taken where necessary 1.55mR0.550mR0.225mR0.550mR0.225m Quarterly Milestones for Programme 5 26

27. Possible reckless lending leading to over-indebtedness Low or non-response from registrants Inadequate reporting on the level of compliance from data sources i.e. accuracy, validity, meeting submission deadlines NCR presence in the rural & underserved communities POSSIBLE CHALLENGES FOR PROGRAMMES 1-5 Lack of understanding of the NCAA Inefficient service delivery Funding

28. REMEDIES FOR CHALLENGES TO PROGRAMMES 1-5  Compliance monitoring: Affordability assessment  Targeted consumer awareness & education initiatives  Coordination with other regulators  Regular compliance monitoring of registrants and enforcement of the Act  Funding Challenge: to find creative ways to perform some functions: Consumer education & research; fees from new registrants; penalties for late renewals; introduce new fee regulations.  Engagement with registrants & key stakeholders  Improve operational efficiency through improved automated processes 28

29. THANK YOU 29

30. 30

31. BUDGET FOR THE 2015/16- 2019/20 31