NCR Worried About Stokvels Becoming Illegal Credit Providers
If an individual or firm starts to lend people money and charge fees or interest on this amount they need to register as a credit provider with the National Credit Regulator (NCR). This is a provision of the amended National Credit Act (NCA) & regulations. Though many companies and individuals choose not to register this is, in fact, illegal and can result in arrest and legal action (including big fines).
‘overstep the mark when they begin lending to members outside the stokvel and act as illegal loan sharks or Mashonisas’
Stokvels are able to operate internally among members but they overstep the mark when they begin lending to members outside the stokvel and act as illegal loan sharks or Mashonisas. It is not uncommon for the Stokvel to lend money to members of the public at rates such as 50%. For those who fail to repay on time, members of the stokvel often illegally enter homes and steal items to sell to offset the debt.
NCR spokesperson Rishana Singh says that if a stokvel lends money to people who were not members and charged them interest, then the stokvel is indeed required to register as a credit provider and stick to all the requirements and limitations of the NCA.