Beware the provider of reckless credit

Vessio, M. L. (2009) Beware the provider of reckless credit. Journal of South African Law / Tydskrif vir die Suid-Afrikaanse Reg, 2009 (2). pp. 274-289. ISSN 1996-2207

Abstract/Summary

Reckless lending is, conceptually, new to the South African legal system. Credit providers in South Africa must now be aware of what will turn them into reckless lenders and avoid practices which may lead them to suffer the legislative consequences. This is not an easy task, as the concept has never before been dealt with by South African legislation and providers cannot therefore rely on precedent to guide their actions. The concept "reckless lending" has been introduced by the National Credit Act and many provisions of the act have been devoted to the practice of lending to consumers who, quite simply, cannot afford it. A last-entered credit agreement may have the effect of precipitating a credit consumer into over-indebtedness. The concept of "reckless lending", to a large extent, works in tandem with that of "over-indebtedness", both of which will be discussed in this article.