Update by DCASA President Presented By: Russell Dickerson Date: 22 August 2018
National Executive Committee Russell Dickerson President Eugene Cilliers Vice President Mauritz vd Heever Treasurer Gerhard Stoltz Secretary Wendy Masegare Member Paul Slot Member Christa vd Merwe Gauteng Kevin Russell Gauteng Jan van der Colff Gauteng Reinhard Pettenberger Western Cape Shaun Zeelie Eastern Cape Johnny Jansen Free State Drisha Pillay Kwazulu Natal DCASA Staff Vanessa Johst Operations Manager Christina Muzondo Administration
DCASA Achievements DCASA has been involved in a Continuous Development Project which will be launched today
DCASA Achievements DCASA provided input and comments in the Proposed Debt Intervention Bill. Just a pity our input and comments are ignored
DCASA Achievements DCASA has had meetings with SA Home Loans and BMW Finance to discuss variable interest rates – both agreed that no increase will be forced during the 5 year court order term, but will be resolved in the end balance.
DCASA Achievements After a number of years with no increase DCASA persistence paid off and the NCR approved a new fee structure earlier this year.
CREDIT MARKET IN SOUTH AFRICA (March 2018) Retail Non-bank Vehicle 4.29Billion R10.91Billion 3.53% 8.97% Bank R94.66 Billion 77,83%
CREDIT STANDING OF CONSUMERS (March 2018) 3+ Months 5.36M Arrears Impaired Records 9.87M Good Standing 15.77M Credit Active consumers 25.46M 0 5 10 15 20 25 30
100000 150000 200000 250000 300000 350000 50000 0 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Industry update Debt Review Clients Jan-16 Feb-16 Mar-16 Apr-16 Active May-16 Jun-16 Jul-16 Aug-16 Sep-16 Expon. ( Active ) Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18
Industry update Distributions to Credit Providers R 1 200.00 R 1 100.00 Distributions to Credit Providers, R 959.44 R 1 000.00 R 900.00 Millions R 800.00 R 700.00 R 600.00 R 500.00 R 400.00 R 300.00 R 200.00 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18
Profile: Consumers in trouble Profile of Consumers in trouble o Between 7 and 13 Credit Agreements o Debt repayments exceeds 50% of take home pay o Highly stressed o 53% believe more debt is the best solution o 42% stop paying and select to do nothing and don’t answer their phone o 5% seek help
Distribution of household liabilities according to income group Source: Momentum/Unisa estimates. 0 – R2 150 R2 150 - R4 180 R4 180 - R7 898 R7 898 - R20 930 R20 930+
Distribution of household liabilities by type of liability according to income group Source : Momentum/Unisa estimates . 46% 95% 54% 0 – R2 150 R2 150 - R4 180 R4 180 - R7 898 R7 898 R20 930 R20 930+
SOME INTERESTING FACTS FROM THE SURVEYS 2017 - debt to income ratio was 72% 2007 - debt to income ratio was 90% This is still very high!! This is worsening the economic situation in South Africa because less of the population are able to save, pension contributions have decreased by about 5% of income in the last 10 years, from about 15% to 10% A lot of households in the top 20% do not possess sufficient financial assets/net wealth to retire financially well or to take care of emergency expenses when the unexpected happens. Momentum/Unisa
Trends in Debt Review ▪ Debt Counsellors assist Clients to replace Credit Life Insurance: o Replacing expensive Credit Life Improves Client Cash Flow o Some Service Providers place Debt Counsellors at risk o If DC receives commission without being registered you may be at risk ▪ Reckless Lending o DC may now charge a fee for reckless investigations o Reckless investigations in 100% of cases might be irresponsible ▪ Check for Section 103(5) compliance on receipt of COB o Need default date and amount date on COB o This is not supplied by Credit Providers o DCASA advised NCR that DC’s cannot perform this task
Trends in Debt Review ▪ Voluntary Debt Review is increasing: o Voluntary Debt Review is not approved by the NCR o Consumers exit Debt Review to make use of Voluntary Debt Review o When Voluntary Debt Review hits a snag they move over to Formal Debt Review with new fees and charges o Credit Providers accept Voluntary Debt Review applications o DCASA reported Voluntary Debt Review Practices to the NCR with examples over the last two years o To date no action is evident by the NCR o If voluntary Debt Review is not banned expect a reduction in formal Debt Review
The future of Debt Review ▪ The Debt Review process is substantially stable. ▪ More consumers should benefit from Debt Review. ▪ The number of active Debt Counsellors has reduced to about 1 500. We expect a further reduction in active Debt Counsellors when the Debt Intervention Bill is approved ▪ We continue to support CIF but progress is delayed in majority of cases ▪ DCASA will continue to monitor non-approved conduct in the industry and urges all members to report any misconduct to both the NCR and DCASA. ▪ This is our industry – if we don’t look after it, it will slowly die.
Thank you
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