Title page for ETD etd-03252010-133047

Document Type Master's Dissertation
Author Mlandu, Nobambo
URN etd-03252010-133047
Document Title The effectiveness of the National Credit Act 2005 in curbing consumer indebtedness
Degree MBA
Department Gordon Institute of Business Science
Advisor Name Title
Ms C Magner Supervisor
  • national credit act
Date 2008-04-03
Availability unrestricted

The growing level of credit extension in South Africa has received a lot of attention recently, more so as household debt, as a percentage of disposable income, tests record highs. It has been argued that this growth in household debt has been driven by ease of access to credit, with authorities going so far as to suggest that lenders have been extending credit ‘recklessly’. The National Credit Act was enacted on the premise that consumers need to be protected from this practice. The Act thus exerts pressure on the credit lenders to assess the consumer’s ability to repay, disclose the cost of credit, as well as setting limit on interest that can be charged. The aim of the research is to investigate the effectiveness of the Act in curbing consumer indebtedness and how it can lead to consumer behavioural attitudes and actions toward credit use.

The research was carried out in two stages. The purpose of the first phase sought to explore the effectiveness of the Act by consulting with those charged with supervision of the Act (the regulator) and those implementing the Act (credit providers), while the second phase conducted a survey amongst consumers to establish their levels of awareness and understanding of the Act, and how they would model their behaviours differently, so as to curb their indebtedness.

The results derived from the research show that an overwhelming acceptance of the Act, its intentions and desired outcomes amongst credit provider and the regulator, and the general need for consumer protection. Consumers, on the other hand indicate a low level of awareness of the Act, its intentions and how it is likely to impact on their finances, making it difficult to tell if it can lead to changes in levels of consumer indebtedness.

© 2007 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria

Please cite as follows:

Mlandu, N 2007, The effectiveness of the National Credit Act (2005) in curbing consumer indebtedness, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-03252010-133047/ >


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