CCB: bill of substance or simply smoke and mirrors?

If one believes all that is said in the media, then the Consumer Credit Bill (CCB) is indeed embraced by many – from the opposition benches in parliament to consumer bodies and others.

This positive embrace is well deserved to an extent as the Bill indeed strives to promote the rights of consumers. However, serious voids and omissions in the Bill of a critical nature need to be highlighted.



Fact check

It stands uncontested that by far the majority of Namibian consumers is over-indebted: many to the point where a substantial portion of these consumers can be classified as ‘food-poor due to debt’.

In simple terms, this means (and quietly raise your hand if this is you): once I have paid all my monthly debt obligations, I simply do not have enough money left to care for myself and dependants - to buy food and other of life’s daily necessities.

This forces me to again loan more money simply to survive, only to be further in debt the next month - a never ending cycle until my soul is crushed.

This is the day-to-day reality of thousands of food-poor and debt-ridden Namibian consumers.



Critical voids

The Consumer Credit Bill offers no assistance or hope to already over-indebted and food-poor consumers.

A careful reading of the CCB shows that the Bill is only focused on the future – to protect consumers not to be exploited and prevent them from becoming food-poor and debt laden.

That is all good and well, but by far the majority of Namibian consumers are already soul-crushed, food-poor and debt-laden today, and needs to be assisted to get out of debt.

For reasons unknown, the Namibia Financial Institutions Supervisory Authority (Namfisa) has decided not to include a very effective legal tool that can assist thousands of food-poor, debt-laden consumers in a similar manner as is done in South Africa, namely the process of debt review.

What is further striking is that large portions in the CCB dealing with over-indebtedness (section 65), reckless credit (section 66), prevention of reckless credit (section 67), as well as the declaration of reckless credit (section 68) were basically simply copied and pasted from the South African National Credit Act.

However, where the legislature in South Africa then went further and made provision for their consumers, who were similarly food-poor and debt-laden, to be assisted to get out of debt by means of a court sanctioned debt review process, sadly Namfisa and the minister of finance simply abandoned the Namibian consumer at this point.

Put differently: the 162-page, 149-section CCB unfortunately is an empty clanging cymbal for thousands of soul-crushed, food-poor and debt-laden Namibian consumers, as after the Bill becomes law, it will make absolutely no difference to their hellish daily lives under the unbearable burden of debt.



What is debt review?

First of all, what is it not? It is most definitely not a way for over-indebted consumers to escape debt and not repay it.

Instead it is a legal and/or court-sanctioned process whereby over-indebted consumers are in a controlled manner assisted to deal with their debt monster.

In practice, and with the necessary legislation incorporated into the CCB, over-indebted consumers will, with the help of a professional debt counsellor, prepare a repayment proposal to creditors wherein outstanding debt is paid off in an affordable manner, taking into account and making provision for the consumer’s daily cost for living, but also paying of debt.

This will require negotiations with creditors for reduced instalments/adjusted interest rates/possible waiver of interest penalties and extended repayment terms.

If these negotiations fail, the debt counsellor will, as a last resort bring the matter before the magistrate court for determinations.



Slavery

Roman moralist Pubilius Syrys said: “Debt is the slavery of the free.”

Why Namfisa then, while having the opportunity to now introduce debt review in the CCB as a way and means to break the shackles of debt slavery, thereby giving hope to thousands, decided not to do so, is hopefully an oversight that will be corrected.

If not corrected, it must invite one to ask the question: for whose benefit, and why, is the Namibian consumer by design kept in debt slavery?

In the words of Nelson Mandela: “Overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of a fundamental human right, the right to dignity and a decent life. While poverty persists, there is no true freedom.”

Thersius Biermann

Biermann Attorney

* The opinions of our readers and contributors do not necessarily represent the views of Market Watch or Namibia Media Holdings (NMH).