An initiative that will attempt to drag millions of overindebted consumers out of the mire is to be launched by the Banking Association of South Africa and other credit providers in May.
This comes after the latest Credit Bureau Monitor for the quarter to December showed that only 10.2 million consumers were in good standing.
The figures were released by the National Credit Regulator (NCR).
The number of consumers more than three months in arrears with repayments or with adverse judgments against them increased to 7.3 million, comprising 41.6 percent of total credit active consumers in December, compared with 40.5 percent in September.
Cas Coovadia, the managing director of the banking association, confirmed yesterday that the organisation and other credit providers had established a separate institution called the National Debt Mediation Association (NDMA) to manage the initiative.
"We will be working with other credit providers on how we can restructure as much of the debts of individuals as possible," he said. The initiative "will be launched with the rest of the credit industry at the end of May".
In response to the suggestion that individuals could approach banks themselves to restructure their debt, Coovadia said individuals did not only have bank debt, but also had retail cards. The NDMA would bring all the credit providers together to restructure this debt.
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