Dear Minister

 

We write as a collective of concerned citizens to strongly oppose the proposed Draft Amendments to the National Credit Regulations, made under your hand on 31 July 2025 in Government Notice No. R. 6510 of 2025, and published in Government Gazette No. 53145 on or about 13 August 2025. 

 

We write to note our objection to the proposed substitution of Regulation 18 to include Sub-regulation (7)(e)"education institutions."  This amendment, if retained, would permit the blacklisting of students with unpaid debts held by educational institutions.

 

This proposal threatens to have severe and disproportionate impacts on young, black, and economically vulnerable South Africans. With youth unemployment and underemployment already at dangerously high levels, imposing punitive credit measures on students (past and present) who have not yet repaid their loans or have defaulted would exacerbate social and economic inequality and undermine the country’s broader development goals.

 

Contextual Economic and Social Factors

 

We take this opportunity to remind you, with respect, of the State of the Nation in a few critical areas.

 

1.    Economic Growth:

 

1.1. GDP growth: Our economy is not growing, with Stats SA revealing that in Q1 2025, it barely moved, resulting in a marginal 0.1% increase. This followed an equally marginal 0.4% increase in the preceding Q4 2024.

 

2.    Unemployment: Our unemployment rate continues to grow. 

 

2.1. General unemployment rate: 33.2%

 

2.2. Graduate unemployment rate: 11.7%

 

2.3. Unemployment by Race: 37.1% for Black/ African South Africans, Coloured South Africans at 24%, 15.1% amongst Indian/ Asian South Africans and 8.2% amongst White South Africans.

 

2.4. 3,6 million South Africans, 35.2% of young people aged 15-24, are Not in Employment, Education, or Training (NEET)

 

3.    Salaries and Income

 

3.1. Salaries and wages account for a similar proportion of employed youths (25-34) and elders (35-59), at 70.4% and 70.1% respectively, whilst remittances account for a larger proportion of income in youth-headed households (14-24), at 48.6%. The racial dynamics in this scenario are well known. 

 

4.    Indebtedness:

 

4.1. South Africans are dangerously indebted. Debt Busters recently revealed that, in Q1 2025, those with a monthly net income of less than R5,000 p/m have an overall debt to income ratio of 83%, whilst those with net incomes over R35, 000 p/m have a ratio of 177%. This is unsustainable and risks grave social unrest. 

 

Our objections are grounded in the following considerations:

 

1.    Unjust, Unfair and Potentially Retroactive Impact: 

 

1.1. The National Credit Act No 34 of 2005 (“NCA”) was specifically designed to protect vulnerable consumers from abusive financial practices. Allowing blacklisting risks delivering vulnerable South Africans to abusive practices that the financial services industry is widely known for, such as retrospectively penalising individuals for debts incurred under a system that previously did not permit such measures. This would be both unfair, unjust and inconsistent with the protective intent of the NCA.

 

1.2. Even if blacklisting were applied properly, the prospects of which we highly doubt, our position is that this intervention runs counter to Democratic South Africa’s long-standing goal of achieving justice and socio-economic transformation. The proposed amendment conflicts with government’s stated objectives and initiatives to expand access to Higher Education and to support youth entering the workforce. Blacklisting students, be they past or present, for unpaid loans discourages educational attainment and limits employment opportunities, particularly for those from disadvantaged backgrounds.

 

2.    Alternative Measures and Scope for Dialogue: 

 

2.1. Punitive measures are not the only approach to managing student debt. Other solutions exist to assist young and vulnerable South Africans without imposing far-reaching and long-lasting harm. Nothing impedes government from exploring alternative constructive measures.

 

2.2. For example, one such is the one proposed by the Economic Freedom Fighters, through their “Student Debt Relief” Private Member’s Bill. It seeks to assist students who have completed their tertiary studies to be able to receive their qualifications irrespective of any debt(s) they may owe the institution of higher learning they studied at, with a view to enabling them to access opportunities. This is a very progressive contribution, as thousands of students are in this position, which unnecessarily impedes their chances of securing further opportunities in finding work or studying further. With respect, we submit that there is room to adopt and/ or improve on this approach, as opposed to the DTIC’s proposal under discussion.

 

In summary, the proposed substitution of Regulation 18, Sub-regulation (7)(e), if implemented, would impose significant harm and deepen socioeconomic inequality. 

 

Whilst objecting to the blacklisting provision as discussed, we take this opportunity to confirm that we welcome dialogue and further engagement toward a solution that protects vulnerable students and graduates.

 

We respectfully urge the Department to note our wholesale rejection of the proposed substation sub-regulation, and urgently engage with stakeholders to develop supportive policies that empower students rather than penalise them for trying to improve their and their families’ circumstances.

 

Attached alongside is a full list of all signatories to this submission.

 

Yours faithfully,

[sent electronically therefore unsigned]
(Mr) Sabelo Chalufu - OBO Petition Signatories