Business Unity SA slams Minister Tau’s decision to withdraw credit act reforms
The minister withdrew proposed changes to the National Credit Act, which were aimed at helping small businesses secure loans.
Motheo Khoaripe speaks to Khulekani Mathe (CEO designate of Business Unity South Africa), John Dludlu (CEO of the Small Business Institute) and Refilwe Monageng (Chief Executive of the Black Entrepreneurs Alliance) about the growing rift between government and business over Minister Parks Tau’s sudden withdrawal of proposed credit reforms.
The Department of Trade, Industry and Competition (DTIC) has been left with egg on its face after it recently gazetted for public comment, several draft amendments to the National Credit Act.
Under the proposed rules, institutions of higher education would’ve been allowed to report unpaid tuition and fee arrears to the credit bureau. The department has received more then 20,000 responses from the public, with many concerned that the new rules would’ve effectively blacklisted students, saddling them with negative credit histories before they even graduated.
Business Unity South Africa (BUSA) says this is a missed opportunity to have abruptly scrapped the reforms, as there were some things that could’ve benefited small businesses.
“Until now…we do not have a credit bureau for small businesses. For juristic persons. We’ve got a credit bureau that collects information on individual consumers. So that when I apply for credit, they have a record of how I conduct my credit then they make a decision. When it comes to SMME’s, there is no such repository of information that can be used by credit providers to assess the credit worthiness of a business.”
– Khulekani Mathe, CEO designate – Business Unity South Africa
“This sets back, the cause of advancing credit to small businesses, in turn allowing them to grow and employ more people. And this is why these amendments were introduced in the first place.”
– Khulekani Mathe, CEO designate – Business Unity South Africa
“…we will reach out to the minister and seek an audience with him so we can really address this matter, because it is so critical to what we’re trying to achieve.”
– Khulekani Mathe, CEO designate – Business Unity South Africa
