Wednesday, September 30, 2009

DRS on AlgoaFM


Hello Everyone

Please tune in to Algoa FM news today! They are airing an interview with Raynard McLaren (COO, DRS Holdings).

I think the next news bulletin will be at 13h00 today.

You can also listen to live audio streaming at www.algoafm.co.za (Just click on the link at the top of the page)

Spread the word!

Tuesday, September 29, 2009

Debt Counselling Process Time line


Good day all,

Herewith the Debt review process – Time line.

Please ensure that all files are diarized according to this time. If you do so, you will not be out of time with your 60 days and have your court documents ready in advance as suggested on this document. Affidavits should be done on day 45 and court pack by day 50.

We have had many branches phone in with complaints about affidavits not being signed immediately by the DC. We made a commitment to the branches that we would reply on submit, allocate and response to queries within 24 hours. Please take note that this does not apply to affidavits as the DC may be out of town from time to time.

We would like to draw your attention to the purpose of the act “section 3” and request that all comply with immediate effect.

In order for DRS Holdings to offer you the excellent service you deserve, we need your co-operation in this regard.

Bernadette Willett
Regional Admin & Training Manager
___________________________________________________________________________
Tel. 041 393 7048
Cell. 083 302 3274
bernadette@drssa.co.za
www.drssa.co.za

Monday, September 28, 2009

The value of the right mindset - Coert Coetzee

Written by — Coert Coetzee

This is an article I wrote for the Real Estate Investor Magazine and the Kulula Inflight Magazine recently...

Have you ever noticed how some people make money when the markets are down, while others make money when the markets go up? If you have, then you’ve probably also noticed that some people lose money when the markets go down and others lose money when the markets go up. In other words, at any given time there are people both making and losing money. Most laymen, and even the supposed experts, would imagine that this is because people’s timing is either good or bad, but I disagree. I’m not an “expert” like the learned property economists who swamp the newspapers with their negative rubbish; I’m just an ordinary guy, and I make money in all market cycles. If an ordinary guy like me can do it, then surely everyone should be able to. Well, everyone certainly can, but you need the right mindset and knowledge – and that’s what I want to write about today.

Get your emotions under control

It’s common knowledge that the two main emotions responsible for all financial misery are greed and fear. If we can control or eliminate these emotions, wealth creation becomes one of the simplest things on earth, but of course that’s easier said than done.

When things are going well and property values are rising, then greed kicks in and people put everything at stake to join the party. Then the market turns, as it always does, and how can you be fearless when you know that everything you’ve worked for is at risk? This drives people to bankruptcy, and even suicide. Why are we so easily swept along by market conditions and the accompanying emotions of greed and fear? I think it’s quite simply due to a lack of knowledge. If you know the markets and, most importantly, if you know your own abilities, then these two emotions won’t hold you back, they’ll benefit you!

Knowledge conquers fear

One of the reasons for my success is that I specialise. I buy a certain type of house in a certain area, because certain houses in certain areas always perform better than other types of houses in other areas. Those who’ve attended my seminars will now understand why I’ve emphasised area identification so much through the years. If you were to read reports fully, as I’ve been reading ABSA’s quarterly report for years, firstly you wouldn’t believe all the rubbish in the newspapers, and secondly you’d notice a pattern – for instance, you’d see that a certain type of house in a certain area frequently achieves better results than others. This would give you the opportunity to be more successful than those ignorant people who believe the newspapers! Success is very effective at eliminating fear!

But I’m like the guy who wears a belt and braces to keep his pants up, and so I also believe firmly in having the right structures in order to eliminate fear. My ideal structure is a correctly set up double trust structure, where the assets and liabilities are legally and effectively separated. If my chosen areas and property type one day leave me in the lurch, I won’t lose a single cent, thanks to the double trust structure – just as I won’t lose my pants if my belt breaks.

You might think that this is overkill, but despite the belt and braces, I don’t even put my own pants at risk. I use another guy’s pants. I buy my houses 110% with other people’s money. Once again, despite what the newspapers (and even the banks) say, it’s still possible and very easy to finance a property’s price, costs and rental shortfalls, if any, using the bank’s money. My own money, earned using other people’s money, is NEVER at risk.

Since 1998, when I started specialising and buying entry-level townhouses with other people’s money in the double trust structure, I have not had a single sleepless night.

How do we conquer greed?

The saying “penny wise, pound foolish” is applicable to all greedy people, without exception, and that’s what leads to their downfall. I don’t know of any greedy person who can hold onto his wealth – it’s only a matter of time before he loses it.


1. Greed causes people not to want to spend money on books. They think that books are a waste of time and that they can rather use that time to make money.
2. Greed causes people not to want to attend seminars, because they don’t want to pay the seminar fee, and they probably think, “What could that guy possibly teach me?”
3. Because of greed, those who do attend seminars don’t follow the process and don’t put their structures in place. They feel that a trust and its administration are too expensive. They could rather spend that money creating wealth. Unstructured wealth is like a house without a foundation. It’s just a matter of time before it collapses. There probably isn’t a better example in the property industry of “penny wise, pound foolish”.

Ignorance can be cured

Of course, it isn’t only greed and fear that are responsible for all misery. Ignorance may not be an emotion, but it is also something that can be easily cured with the things already mentioned above. Something that’s difficult to fix though, is the result of greed, fear and ignorance. In the current recession there are thousands of people who are carrying the consequences of these three things.

The biggest mistake people make when they land in financial difficulties is to hide away from their creditors. This makes everything ten times worse. If, for example, you can’t pay your bond anymore, you have to go and speak to the bank immediately. You should preferably do it BEFORE you get behind, but even if you’re already behind, go to your bank immediately. All the banks have assistance programmes, like, for example, a temporary suspension of bond payments. There is currently a bank that will give you a whole year’s postponement on your bond repayment. The amount that you don’t pay during that year is then recapitalised over the rest of the term of the bond. It might not always be apparent, but even the banks know that a slump is just temporary. If they help you, they’re helping themselves, because if they repossess your house, everyone loses, including them. It’s only the auctioneers who make money.

This article has been full of tips, but in case you missed them, here is the summary:

1. If the newspaper refers to a report as their source, go and find the full report and read it.
2. Always look for something that will put you ahead of the masses, like, for example, specialising in a certain type of property and a certain type of area. It’s not only the typical Treoc Entry-level Type House that is still performing. Student flats and houses in townships are performing far above average, to mention just two examples. Unfortunately the banks don’t give statistics on categories like this, but our Treoc members are reporting double-figure growth.
3. Read books. The bookshops are full of books about property investment, and then there are also specialist titles, like my book “Let there be Light on Wealth Creation”, and my new book “Rich Mind Rich Man”, which can be ordered from www.treoc.com.
4. Attend seminars about property investment in South Africa. Our country has excellent seminars that are presented by true investors.
5. Don’t overestimate your financial abilities. Make sure you can afford whatever you do.
6. Never ever work without the correct double trust structures.
7. Don’t hide away if you hit trouble. The recession is affecting everyone and you’ll be amazed at how understanding people are. It’s not a disgrace!

Source www.lightminded.com

Saturday, September 26, 2009

How to Buy 2010 FIFA World Cup Tickets

The indispensable 10-in-1 guide to the where, what, how and when of buying tickets for the 2010 FIFA World Cup in South Africa.

The countdown to the 2010 FIFA World Cup South Africa is ticking fast, with fewer than 300 days to go. CapeTownMagazine.com looks forward to a fantastic African World Cup, and brings you the most essential, no-nonsense 2010 World Cup information.

10 Important Tips on Buying Tickets for FIFA 2010:

Tip 10: Put in your leave request early!
The game schedule for each city has been finalised and you can now see which games are being played where. Orientate yourself with the 2010 World Cup game schedule.

Tip 9: Know when tickets for 2010 go on sale: Tickets for 2010 go on sale on Friday 20 February 2009 at 13h00 South African time. Fans applying for a ticket in this first of five ticket-sale phases (ending on 31 March 2009) will be entered into a draw that takes place on April 15. Within three days, they should be notified if they were successful. Learn more about ticket sales for 2010. The next round to apply will be on 5 December 2009.

Tip 8: Get tickets in your cities of preference: A great experience can be to stay in one host city and thus buy tickets for games only in that city. Check out the match dates per city in the 2010 World Cup Match Schedule.

Tip 7: Get tickets for your favourite team:
You will have to wait for the final draw in December 2009 to know when and where your favourite teams will be playing. You can apply for up to four team-specific ticket series of up to seven games for a chosen team. Read more about FIFA 2010 World Cup Qualification and Groups.

Tip 6: Budgeting: buy the right tickets for the right price: Decide how much you’re willing to spend on 2010 tickets and then choose, for example, a number of first-round matches, or just the final, or a mix. You can compare ticket prices for the various matches and categories in our article on 2010 Ticket Prices .

Tip 5: Get tickets for the right positions
: Final seating plans are not yet known due to stadium construction not yet being complete, but in the meantime you can see how much the best seats in the house will cost by reading up on the 2010 ticket categories and prices.

Tip 4: Wait for the final draw (at your own risk!): You can buy venue-specific or team-specific tickets from 5 December 2009 until 22 January once you know where and when your team will be playing, which will be revealed on 4 December 2009 in the final draw for the 2010 FIFA World Cup.

Tip 3: Surprise your friends with 2010 Tickets: They’ll make the perfect gift for anyone even vaguely interested in soccer. You can apply for a maximum four tickets per match for up to seven matches. So if you’re feeling generous then act quickly and apply for FIFA 2010 World Cup tickets.

Tip 2: Don't just buy tickets, know the lingo:
Don’t know what a vuvuzela is? Don’t know what “laduuuma!” means? If you want to experience the real “Mzantsi” in 2010, best you find out right now by reading our Guide to South African Local Lingo !

Tip 1: The big one: where to buy 2010 tickets:
5 December 2009 is the biggest date in the build-up to the 2010 FIFA World Cup. Ticket applications open on this day at 11h00 GMT (13h00 South African time), and to apply for them you can either visit any First National Bank branch in South Africa, or log onto the FIFA website. You will need to register, log in and order your tickets - but you can only do this from 5 December 2009.

Source: CapeTownMagazine.com

Friday, September 25, 2009

Legal Matters - Know your rights!








Make sure you know your rights!

By Kent Williams, Director of the DRS Legal Team

The long awaited High Court declaratory order finally came out on 21 August 2009. Judge Ben du Plessis considered a number of issues and reached the following decisions:

In all three findings a debt counsellor can make a formal hearing needs to be held unless all parties concerned agree otherwise.

The Magistrate’s Court has jurisdiction to hear debt review applications even if the total liabilities of the consumer exceed the monetary limit of the Magistrate’s Court.

The power of the Magistrate’s Court to hear these matters is derived from the National Credit Act read with the Magistrate’s Court Act.

The Magistrate’s Court Act 32 of 1944 and the Rules of the Magistrate’s Court governs the procedure which the Magistrate must follow when conducting a debt review hearing.
As consequence of the above, the referral of the debt counsellor is an application in terms of the Magistrate’s Court Act and as such has to comply with the formal requirements of Rule 55 of the Magistrate’s Court Act.

Debt Review applications must be brought in the Magistrate’s Court which has jurisdiction over the consumer


Rule 33 of the Magistrate’s Court Act which deals with cost orders is applicable in debt review matters, bearing in mind that the debt counsellor fulfils a statutory duty.

Rule 9 of the Magistrates’ Courts’ Rules which deals with service of process is applicable to debt review matters, but documents may be served via fax or e-mail if all parties agree.

A debt counsellor has a duty to assist the court and should be available to render such assistance by way of furnishing evidence or making submissions as to his proposal.

If a court finds an agreement to be reckless because the credit provider failed to conduct an assessment or conducted an assessment which indicated that the consumer did generally not understand the risks, costs and obligations under the said credit agreement and continued to enter into an agreement – the court may order that whole or part of the consumer’s rights and obligations under the agreement be set aside OR the court may suspend the force and effect of the agreement for a period.

If a court finds an agreement to be reckless due to the fact that the credit provider entered into an agreement with the consumer after doing an affordability test which showed that entering into the agreement would result in the consumer being over-indebted – the court may suspend the force and effect of the agreement for a period AND restructure the consumer’s OTHER obligations in accordance with the manners of restructuring provided for in Section 87.

The last matter the judge addressed was the issue of the induplum rule. It was held that the penalties, charges and interest accrued by a person defaulting on a debt may not exceed the amount owing under that debt.

The impact of the above declaratory order on the practical aspects of debt review applications will soon be determined. At least now the courts which have been refusing to hear matters while the above order was pending can commence hearing matters and consumers all over South Africa will be able to obtain protection from their creditors and relief from their over-indebtedness.


Kent Dylan Williams
kent@burmeisters.co.za
082 441 5486 / 011 373 9693

Thursday, September 24, 2009

Debt help now only a cellphone away

WORLD’S FIRST MOBILE DEBT COUNSELLING SOLUTION

In a landmark deal that is a world first for South Africa’s largest debt counselling agency DRS, the company has signed a deal with Debt Breaker to bring mobile debt counselling to indebted consumers through popular e-media like MXit and Google Talk.

With the global credit crunch putting increasing financial pressure on ordinary South Africans, consumers can now look as far as their cellphone to find answers to their debt problems.

Debt Breaker is an innovative cellphone service developed by Cape Peninsula University of Technology lecturer Marlon Parker, which can be used by over-indebted consumers to access advice and support remotely through MXit, Google Talk, Fring, Nimbuzz, Mig33 and other chat applications.

It is estimated that 60% of about 19 million consumers require assistance in South Africa.

The DRS and Debt Breaker association will offer direction, education, support and advise on debt related issues to thousands of debt stricken mobile phone users. About 7000 vehicles and 2500 homes are being auctioned on a monthly basis. Credit Bureaus are reporting that 53% of all consumers reflect impaired credit ratings, yet less than 100 000 consumers applied for Debt Review thus far.

I saw an opportunity to reach the masses using mobile and web technologies to address the debt problem. This also allowed us the opportunity to be the world‘s first providers of live debt counselling, education, advice and support over cellphones using instant messaging ,” Parker said.

With Debt Breaker, consumers will be able to get free advice with regard to debt-related issues and practical remedies will be suggested. Debt Breaker needed a reputable Debt Counselling organisation with a strong national footprint to manage all the referrals generated through this free and confidential service.

According to Jean Botha, CEO of Debt Restructuring Services (DRS) the company is excited about partnering with Debt Breaker and to be taking their message of hope to this largely untapped market.

With South Africa‘s largest mobile instant messengers (MXit, Mig33, The Grid, Fring) boasting combined numbers of over 15 million users of which the majority are between the ages of 18 and 35, it presented itself as an ideal medium to support the masses,” says Botha.

We believe that the South African consumer is still largely unaware of their legal rights when it comes to dealing with debt. They don’t realise that the law has been changed to protect and assist them and that debt counselling and the debt review process holds a myriad of advantages for them. By associating with the Debt Breaker team we are encouraging open discussion on the topic and letting people know that there is a viable get-out-of-debt option available to them. We are hoping that a faceless, nameless, safe space to communicate will encourage more people to reach out for help” .

Together DRS and Debt Breaker will strive to break the stigma attached to financial difficulty and provide a lifeline to a nation in need of workable debt solutions.

Motivational Quote for the day

The funny things about life, if you expect nothing but the very best, you often get it.

Wednesday, September 23, 2009

24 September is Heritage Day in South Africa

WHAT YOU NEVER KNEW ABOUT SOUTH AFRICAN HERITAGE!

1. FROM CHINESE TO FRENCH - EVERYONE IN THE WORLD IS SOUTH AFRICAN: All the worlds people are “twice South African” because it was here that mans descendants and modern man both evolved

2. THE FIRST EVIDENCE OF LIFE ON EARTH YES FROM SA: In eastern South Africa, scientists have found traces of blue-green algae dating back 3 500 million years. This is some of the earliest evidence of life on Earth.

3. METEORS HIT PRETORIA 220 000 YEARS AGO!: 220 000 years ago a meteorite struck South Africa, forming the Tswaing Crater northwest of Pretoria. This is one of the most accessible and best-preserved meteorite impact craters in the world.

4. IF ALIENS LANDED THEY WOULD BE THE PROPERTY OF THE STATE! According to the National Heritage Resources Act, all meteorites are considered protected property of the nation and there are rules regarding what can be done with them. Interestingly, because a meteorite is defined as “any naturally-occurring object of extraterrestrial origin”, this means that if an alien landed in SA he/she/it would become the property of the State. Should an alien arrive and find that SA did not suit its disposition, it would not need a passport to leave but it would have to acquire an export permit from the South African Heritage Resources Agency (SAHRA).

5. SA HAS THE WORLD’S OLDEST REMAINS: The oldest remains of modern humans were found in Klasies River Cave in the Eastern Cape. They are well over 100 000 years old.

6. SOUTH AFRICA HAS OVER 2000 SHIPWRECKS: There are more than 2 000 shipwrecks, dating back at least 500 years, off the SA coast and more than one, including the Waratah, simply vanished without a trace.

7. TRANCE WAS HERE OVER 25 000 YEARS AGO: Trance is nothing new to South Africa. In fact, bushman cave paintings in the Drakensburg are thought to be the work of Shamans operating in a ‘trance’ state. Some of these are up to 25 000 years old.

8. THE SAYING "WOMEN AND CHILDREN FIRST" COMES FROM SA: The practice of “women and children first” originated off the coast of Hermanus when the British ship, the Birkenhead, sank in 1852. Of the approximately 600 people on board, all 200 women and children survived. Unfortunately, almost 400 men went down with the ship.

9. SOME THINGS NEVER CHANGE: Detailed documentation from travelers and researchers in the Cape in the 1600s shows that more than 350 years later the traditional “maatjieshut” residence of Namaqualand is still being built in precisely the same manner and proportions as those of the KhoeKhoe people of the past.

10. SOUTH AFRICA THINKS AHEAD OF THE WORLD: South Africa is one of the first countries in the world to formally protect places associated with “Living Heritage” that is based on stories passed down from generation to generation by for e.g. Grandmothers telling children stories about the places in which they live. One of the first projects in South Africa that looked at how we can protect such sites took place in Dukuza (formerly Stanger) in KwaZulu-Natal. The town was the site of King Shaka’s royal residence and interviews with old people in the community revealed an amazing store of information passed down over nearly 180 years concerning things like from which spring the royal water was drawn, where the King swam, under which trees particular events and councils occurred.

11. THREE MILLION!: South Africa’s history and pre-history goes back more than three million years.

12. KAROO BOASTS THE BEST DINOSAUR FOSSILS: The Karoo region is home to some of the best fossils of early dinosaurs.


ABOUT SAHRA

On 1 April 2000, the South African Heritage Resources Agency (SAHRA) replaced the National Monuments Council as the official governing body overseeing the protection of South Africa’s cultural heritage. SAHRA is a statutory organisation established under the National Heritage Resources Act. Central to the SAHRA mission are mandates to encourage public understanding and enjoyment of the national estate and to promote public interest and involvement in the identification, assessment, recording and management of heritage resources.

Libra Astrology September 23 - October 22

Libra Strength Keywords: - Diplomatic, - Graceful, - Peaceful, - Idealistic, - Hospitable

Libra Weakness Keywords: - Superficial, - Vain, - Indecisive, - Unreliable

Libra and Independence:
Libras like to be around other people, they are all about partnerships and groups. They are happiest when other people are around and when other people are doing their work. They are lazy but like posh surrounding and nice decor. These two extremes could strike a balance and the Libra living on his own could either have a very messy place or a very intricately decorated place. They can be independent, they have the intelligence and the full capability within but would a Libra rather co-exist/depend on others.

Libra and Friendship:
Libras love excitement, new situations, adventure and the unusual. They make friends with people from all walks of life and they are always up to something new and exciting with enthusiasm. Libras are great at getting along with people, everyone likes a Libra. They are all about partnerships and groups, they are the glue that hold a group together because they are the ones responsible for keeping harmony and peace. Libras have mastered the art of relationships, not just romantic but business, personal, and family relationships just to name a few. No one is able to see another person's point of view better then a Libra.

Libra and Business:
Libras dislike hard work, they are lazy when it comes to getting their hands dirty and doing the work themselves. Fortunately, their intuitive instincts are good at telling them where money can come from. They can think up great business ideas that are original and bound for success, they can initiate the idea but they need someone else to do the work. Libras make good business partners but not good business people on their own. Libras have potential of being a good leader with their diplomatic ways, but but they are just too lazy to do the hard work required and climb a corporate ladder. A good way for Libra to become wealthy is through artistic endeavors. They can be painters, interior decorators, actors or writing screenplays or composing. These are great ideas because it incorporates Libra's hobby with a moneymaking venture.

Libra and Temperament:
Libras have excellent instincts and intuition, most of the time they do not trust them enough. Libras are likely to be underachievers due to the easygoing attitude. This does not mean that they are necessarily lazy, they just make do with whatever comes their way. They do not want anything badly enough to fight for it. The only time that a Libra will usually stand up is if a situation is unfair, the only time a Libra will definitely stand up is if they feel something involving them is unfair. They need their respect and their fairness, after all, Libra has done so much for other people, it deserves at least fairness, right? When this issue comes into play, Libra becomes courageous.

Libra Deep Inside:
They are also likely to hide or bend their own true feelings in order to bring peace with a group and to make others like them. Sometime this results in them not really knowing what their true feelings are because they are trying to make everyone happy. Other people can see this and Libras have earned themselves a reputation for being indecisive, they simply do not want to hurt anyone's feelings or cause disorder or friction in a situation. This spills over inside the person and many times, Libras have difficulty making decisions. Inside, the Libra is very insecure, they suffer from a lack of self confidence, they are always searching for something to complete them. This is another reason why they are social butterflies, it is an unconscious attempt to find the missing peace through other people. By trying to appease other people all the time, Libras don't really know who they are inside. Libras desperately need love and approval, they will do the favors that people ask and and have a hard time saying 'no' or 'I'm too busy' in order to prove how nice they are, this gradually builds up resentment and negative self esteem issues inside. Libra's indecisiveness is caused by fear, their fear that a wrong decision will make everything come crashing down around them and cause turmoil in their lives. Life is not like that and the Libra that acknowledges the fact that life has ups and downs will be less emotionally wound up, not so hard on themselves and as a result, they will be a much happier person.

Libra in a Nutshell:
Libras are the diplomat of the zodiac. They are able to put themselves in other's shoes and see things through another person's point of view. They are the ones that always want to make things right and have balance and harmony in their life, their surroundings and the lives of the people close to them. They have captivating charm, elegant taste and they are easy to like due to their eager-to-please, easygoing nature. In return for a Libra's amazing ability to be a good listener, sooth and calm people, they expect admiration. Libras will gather a group of people, everyone will become friends then the Libra will be in the center of the group. They like the attention and the admiration for the people that they have brought together. Libras are very intelligent, they often hide this inside their easygoing exterior. They express their intelligence through creativity, most are involved in some sort of artistic or creative pursuit. Many people overlook just how intelligent a Libra actually is. When others see a Libras wide range of interests and hobbies, their intelligence and creativity is more then obvious. Libras love variety and different situations. They welcome change. Libras love luxury. They will spend lots of money and surround themselves with beautiful things and they seem to be constantly fussing over their appearance. They love anything upscale and classy. Libras work hard to please others, this they do an others find them incredibly captivating.

What it's Like to Date a Libra Woman:
Libra woman is enchanting and charming, she is the master of the art of seduction. The environment is important for Libra, make sure the first date is somewhere classy and elegant with posh surroundings, such as lunch at an elegant bistro then a walk along the tree lined pathways of a ravine in the summertime with the flowers blooming. Libra will feel at peace and love it. Give her compliments and tell her how much she is appreciated. She may reply bashfully but with each compliments, the radiant glow inside her will shine brighter and brighter. Once the initial seduction is over with and the relationship has become more stable, she will stop her sweet seductive ways, not because she has completely lost interest, but it is because she is lazy in love. She may need a few days away without you, this is like pressing the reset button on the relationship. Be romantic with her and she won't lose interest. Be dramatically romantic, sweet love notes tucked in her pocket, flowers, these things bring great joy to the Libra woman and they make her feel special, which is essentially important to the Libra woman.

What it's Like to Date a Libra Man:
The Libra man is very popular with women because he is charming, harmonious and can relate to women on their level - a characteristic of Libra is the ability so see the world through the eyes of others. Libra men do this to seduce the girl and it always works. He always seems to be on the search for the perfect women, unfortunately, that does not exist. The closest thing a perfect woman could do is appreciate and be in awe of his stardom. Look up to him, admire him, he is a sucker for flattery. Do not nag or pick on his inability to make a decision, it will simply put pressure on him. You make the decision if he cannot, he will happily go along with you and deep inside will be happy that you took control.

How to Attract Libra:
Libras are easy to attract, they probably have attracted you first with their easygoing nature. First and foremost, admire and flatter them. Treat them like a prince or princess. Libras love to talk, they can talk about anything but are especially interested in themselves. Want to leave a lasting impression on a Libra? Ask questions about them and talk about their interests, hobbies, anything regarding them. Even though Libras are diplomatic, they enjoy seeing things from other points of view. Engage in a light debate about an issue exploring both sides and the conversation will flow. Dress nice, keep the atmosphere posh and upscale and clean your house before they come over for the first time. First impressions are lasting for Libras. Have fun, be yourself, you are almost guaranteed a good time with the easygoing, interesting Libra.

© Copyright 2006 Zodiac-Signs-Astrology.com

Monday, September 21, 2009

5 Tips for Surviving the Credit Crunch

The NCR have launched a Consumer Campaign
  1. Dont ignore your debt
  2. Prioritise and pay your debts
  3. Avoid borrowing to pay off debt
  4. Cut down on expenses
  5. Start Saving

To view these images in a larger format: (when viewing directly on the DRS Blog)
  • Right click on the image
  • Choose to Open in New Tab / New Window





Sunday, September 20, 2009

DRS Office - West Coast, Vredenburg

1. WAT IS SKULDBERADING?

Skuldberading is ‘n proses wat deur die Nasionale Krediet Wet geskep is om persone te beskerm en by te staan wat sukkel om hulle basiese uitgawes en hulle maandelikse skuldpaaiemente te dek.

‘n Gekwalifiseerde Skuldberader sal jou bystaan met die opstel van ‘n begroting om eerstens jou maandelikse uitgawes te betaal en dan die bedrag bepaal wat beskikbaar is om aan jou skuld te betaal. Basiese lewensuitgawes maak voorsiening vir behuising, vervoer, kos, skoolfonds, munispale dienste, mediese fonds, versekering, klere en onderhoud.

Die geld wat ‘n persoon beskikbaar het nadat sy minimum lewensuitgawes betaal is, is die bedrag wat ‘n persoon beskikbaar het om aan sy skuld te betaal per maand.

Indien die geld wat beskikbaar is minder is as wat nodig is om al die krediteure te betaal, sal die geregistreerde skuldberader namens u met u krediteure onderhandel om die termyn te verleng en u dan in staat te stel om‘n verminderde bedrag per maand te betaal.

Gedurende hierdie aansoekperiode en vir die tydperk van skuldberading sal u beskerming van die wet geniet en kan geen van u krediteure enige regstappe teen u neem nie.

Hierdie beskerming sluit u huis, motor en meubels in.

Huidiglik word ongeveer 6 000 motors en 2 000 huise per maand teruggeneem. Al hierdie terugnames kon verhoed gewees het indien die verbruikers betyds aansoek gedoen het vir skuldberading.

2. WIE KWALIFISEER VIR SKULDBERADING?

Indien ‘n persoon sukkel om al sy maandelikse verpligtinge na te kom, kan hy in terme van die wet aansoek doen by ‘n geregistreerde skuldberader wat dan sal bepaal of so ‘n persoon oorbelas is.

IS JY BANG JY GAAN JOU HUIS OF MOTOR VERLOOR? Ja

IS JOU GELD OP VOOR DIE MAAND OM IS? Ja

BETAAL JY JOU SKULD, MAAR HET DAN NIE GELD VIR KOS EN ANDER NOODSAAKLIKE UITGAWES NIE? Ja

GEBRUIK JY EEN KREDIETKAART OM ‘N ANDER EEN TE BETAAL? Ja

Indien jy ”Ja” geantwoord het op enige van die bogenoemde vrae, is die kanse goed dat jy oorbelas is. Doen vandag nog aansoek om berading en geniet beskerming onder die wet.

3. WAT GEBEUR MET MY HUIS OF MOTOR?

Indien ‘n persoon aansoek doen vir berading voordat die bank stappe geneem het om ‘n persoon se eiendom terug te neem, geniet die persoon beskerming onder die wet en kan niemand beslag lê op enige van die persoon se eiendom nie, selfs al betaal ‘n persoon nog af aan die huis, motor of meubels.

4. HOE BEïNVLOED SKULDBERADING MY KREDIETREKORD?

Terwyl ‘n persoon onder skuldberading is, sal dit so gelys word by alle geregistreerde kredietburos en kan ‘n verbruiker nie nuwe krediet bekom nie.

Sodra die skuld klaar betaal is, word die persoon se inligting rakende skuldberading van die kredietburo’s verwyder en bly daar geen nota’s van skuldberading op ‘n kliënt se naam agter nie. ‘n Kliënt is dan vry om aansoek te doen vir krediet waarvoor ‘n persoon sou kwalifiseer.

5. OP PAD NA ‘N SKULDVRYE LEWE!

Dit is belangrik dat verbruikers besef die hele proses van skuldberading is daar om verbruikers te help om hulle uit hulle skuldweb te bestuur.

Die hoofdoel is om verbruikers in staat te stel om volgens ‘n plan hulle verantwoordelikhede aan krediteure na te kom terwyl daar voorsiening gemaak word vir basiese lewensuitgawes en die beskerming van ‘n persoon se bates.






DRS West Coast
Marius Coetzee
email: mariusc@drssa.co.za
The Atrium
31 Main Road, Vredenburg.
082 978 4407

Friday, September 18, 2009

Red Carpet for Non-Compliance

National Consumer Tribunal shows red card to non-compliant debt counsellors

Press Release September 2009

The National Credit Regulator (NCR) is concerned over several instances of non-compliance with the requirements of the National Credit Act (NCA), its Regulations and conditions of registration by NCR-registered debt counsellors. Adv Jan Augustyn, Manager of Investigations and Prosecutions, said that such non-compliance could cause further prejudice to already over-indebted consumers and the NCR is proceeding with numerous investigations to ensure debt counsellors do comply with legislation. Augustyn said a number of these investigations have already been referred to the National Consumer Tribunal for adjudication.

In one such matter, the National Consumer Tribunal has ordered debt counsellor Ralph Zulu, of GNR and Associates CC, Kwazulu-Natal, not to take on any new clients for the six month period to February 2010. Gideon Mashamaite, Senior Prosecuting Officer at the NCR says Zulu was not adhering to several NCA and Regulations requirements with regard to:
  • deadlines,
  • keeping of proper records, and
  • following the debt counselling process through to the end.

The NCR therefore requested the Tribunal to cancel the registration of Zulu. The Tribunal also ordered Zulu to allow the NCR to conduct monthly investigations into his business to ascertain whether he is complying with relevant legislation, with all reasonable costs of the investigations to be borne by Zulu.

During this investigatory period, the registration of Zulu with the NCR as a debt counsellor remains valid and in effect.

On completion of the investigations, if Zulu is found to be non-compliant, the Tribunal will order his registration with the NCR as a debt counsellor to be cancelled.

The Tribunal also ordered Zulu to hand over any debt counselling matters in progress where consumers are at risk of losing crucial property such as homes, should credit providers proceed with legal action. The NCR would prioritise and hand over these matters to other debt counsellors.

For his remaining clients, the Tribunal ordered Zulu to deal with these matters urgently, to avoid legal action being taken by the relevant credit providers. For debt counselling clients who no longer want to remain with Zulu, the NCR would reallocate them to other counsellors.

For all reallocated cases, Zulu is required to pay over to the NCR any fees already received, in order to cover the fees of the new counsellors.

Where credit providers are insisting on proceeding with their legal rights against Zulu’s clients, the Tribunal has requested the NCR to discuss the matter with these lenders, in the hope that they will continue with the debt counselling route rather than take legal action.

Mashamaite highlights several instances of legislative violations by the debt counsellor in this matter. “The relevant provisions are NCA Section 86 and Regulation 24. The debt counsellor was not issuing the required documentation to relevant credit providers and credit bureau on receiving an application for debt review; was not making determinations as to whether an applicant was over-indebted or not; where an applicant was found to be over-indebted the counsellor was not submitting credit providers with debt rearrangement proposals; where credit providers did not accept debt restructuring recommendations, the counsellor was then not referring the matter to court, as is required by legislation; and because the counsellor was exceeding the 60 day limit allowed for debt review applications, credit providers were exercising the right to terminate the debt review process, depriving consumers of a much-needed debt counselling opportunity.”

The Tribunal, in its decision, highlighted that debt counsellors play a key role in the debt review function and that if debt counsellors do not perform effectively, their clients are placed at great risk. Credit providers can also be adversely affected, as by participating in debt counselling, they have chosen not to pursue their legal rights to recover - only to then face uncertainty on the status and progress of the debt counselling process if the counsellor does not follow correct procedure.

In yet a another case, an investigation into Barry Kotze, a registered debt counsellor and Centurion-based attorney, revealed instances of non-compliance, including:
  • charging fees in excess of guidelines;
  • failing to timeously process debt review applications and/or
  • taking the necessary steps to effect restructuring of consumers’ debts;
  • not applying to the Magistrates’ Courts for restructuring approval, particularly regarding consumers who had started to make repayments in accordance with restructuring agreements;
  • failing to make use of NCR-approved Payment Distribution Agencies;
  • failing to maintain adequate controls and accounting records; and
  • not paying over monies received from consumers to the relevant credit providers.

These actions similarly were leading to prejudicial early termination of the debt review process by credit providers and legal action being taken against consumers. Adv Jan Augustyn indicated that the investigation remains ongoing but has been referred to the National Consumer Tribunal in order to obtain interim relief for consumers.

The Tribunal ordered that although Kotze’s registration as a debt counsellor remains in force during the investigation, he is prohibited from accepting further applications for debt review and that existing debt review applications must be transferred to other registered debt counsellors if requested by his clients. Full details of all clients must be handed over to the NCR as well as an audited statement of all receipts and disbursements. He was also instructed to pay over all amounts received from consumers to an approved payment distribution agency and recover amounts as not yet paid out from non-approved payment distribution agencies.

The orders in these cases point to the Tribunal’s approach of rehabilitation rather than penalisation through fines or immediate deregistration.

Non compliance with an order of the Tribunal is a criminal offense punishable by a fine and/or imprisonment for a period not exceeding 10 years.

Issued by:
Bullion PR & Communication, Fezile Africa
On behalf of:
National Credit Regulator, Lebogang Selibi, Tel: (011) 554-2722

Thursday, September 17, 2009

DRS Training

Training takes place at DRS Holdings on a regular basis. Herewith a nice view of what our facilities look like and some more of our future excellent Debt Counsellors hard at work.




For more information you can contact:
Raynard McLaren
Chief Operations Officer:
Debt counselling & Legal
Tel. 041 393 7046
raynard@drssa.co.za

Email marketing big winner in downturn

email_small.jpgSource : ADOTAS

Most marketers plan to decrease media spending budgets, and the remaining expenditures are shifting toward digital, according to a Q2 2009 survey by Round2.

EMarketer notes that budgets were more likely to be cut than increased for traditional media such as TV, radio and direct mail, but more respondents said they would up their investments in e-mail marketing, search and interactive than said spending would be reduced.

downtown.jpg

E-mail marketing was the channel most likely to see an increase in spending in 2009, and print was the biggest loser

downtown2.jpg


What can we do at DRS Holdings to join this powerful marketing force?

  1. The most important thing is to start to build a decent database of your clients and suppliers.
  2. Send frequent emails
  3. Send Informative emails that are short and to the point.
  4. Always have a point of return of your emails (how to get hold of you).

Wednesday, September 16, 2009

Gabriel Davel CEO of the NCR Presentation

Gabriel Davel, CEO of the National Credit Regulator recently hosted a presentation providing an overview of the conditions in the South African credit market, prior to the introduction of the Act. He assesses the impact of the Act in a few key areas in the 2 years since its introduction.

This seminar on the National Credit Act, was hosted by Lexix Nexis on the 9th of September 2009 in Johannesburg.

Matters discussed in the presentation were the following:

  • UN Guidelines for Consumer Protection
“… imbalances in economic terms, educational levels, and bargaining power …
“… market conditions which provide consumers with greater choice at lower prices.
“… adequate information to make informed choices … individual wishes and needs
“… protected from contractual abuses as one-sided standard contracts, exclusion of essential rights in contracts, and unconscionable conditions of credit by sellers.

  • Why did SA introduce NCA, and everybody else went into the opposite direction?
  • The Credit Law Review built on the work that had already been done in the “Competition in Banking” report

To download his presentation Click Here


Motivational Quote for the day

Tough times never last, but tough people do!!...

Lean not on your own understanding.

Tuesday, September 15, 2009

DRS assists in the pressures of the recession

THE South African group who conceptualised using social media like MXit to address social problems affecting young people has celebrated one year of success – and sealed a deal with a Bay company to further their progress.

The success story began a year ago with 12 men and women who called themselves The Reconstructed. All had experience of either drug addiction and dealing as well as gangsterism but, fully rehabilitated and trained to council people, they began using MXit to reach out to those at risk.

The brainchild behind the principle is social entrepreneur and information technology lecturer Marlon Parker.

Parker was in Port Elizabeth this week to introduce non-profit organisations, NGOs, community-based organisations and charities to social media and help them use these technologies as strategic tools for engagement, relationship building with stakeholders, networking and fundraising.

Parker, who lectures at the Cape Peninsula University of Technology, is doing his PhD in information technology and focusing on using technology to change communities at risk.

The project was launched in August last year and the service has about 10000 subscribers. About 750000 messages have been received and more than 30000 conversations have taken place.

Statistics over the past year showed that Tik, or crystal meth, was the most prolific drug, with more than 6600 related conversations.

This shows us an example of where mobile phones can be used for social good and make the difference in the lives of thousands,” Parker said.

After the drug advice service proved successful, the Angel 24/7 project was launched. It was aimed at providing youngsters with information on issues like substance abuse, HIV/Aids, abuse and depression – also made accessible through MXit.

Then the Debt Breaker project followed to help those battling the pressures of the recession.

During his Bay visit Parker announced that South Africa’s largest debt counseling agency – Port Elizabeth-based Debt Restructuring Services (DRS) – had signed a deal with Debt Breaker to bring mobile debt counselling to indebted consumers through popular e-media like MXit.

Source : The Herald

Monday, September 14, 2009

Join Our Franchise

A First in South Africa...

Debt Counselling Franchises now available.



Opportunities are available for professional people with our proven branded system.

Receive initial and ongoing hands on training.

Administration, IT, sales and marketing support.

Assistance with site selection and office design.

An investment of between R60 000 and R120 000 guarantees exclusivity in certain areas.

Start up cost of R20 000.



Contact:

Wednesday, September 9, 2009

Motivational Quote for the day

The desire to win must be stronger than the fear to lose.

MXit - Get debt help on your phone

South African partnership provide world’s first mobile debt counselling solution.

In a landmark deal that is a world first for South Africa’s largest debt counselling agency DRS, the company has signed a deal with Debt Breaker to bring mobile debt counselling to indebted consumers through popular e-media like MXit and Google Talk.

With the global credit crunch putting increasing financial pressure on ordinary South Africans, consumers can now look as far as their cellphone to find answers to their debt problems.

Debt Breaker is an innovative cellphone service developed by Cape Peninsula University of Technology lecturer Marlon Parker, which can be used by over-indebted consumers to access advice and support remotely through MXit, Google Talk, Fring, Nimbuzz, Mig33 and other chat applications.

It is estimated that 60% of about 19 million consumers require assistance in South Africa.

In today’s current economic climate it is essential that consumers are aware of their rights in terms of the new credit act.

The DRS and Debt Breaker association will offer direction, education, support and advise on debt related issues to thousands of debt stricken mobile users. About 7000 vehicles and 2500 homes are being auctioned on a monthly basis. Credit Bureaus are reporting that 53% of all consumers reflect impaired credit ratings, yet less than 100 000 consumers applied for Debt Review thus far.

“I saw an opportunity to reach the masses using mobile and web technologies to address the debt problem. This also allowed us the opportunity to be the world‘s first providers of live debt counselling, education, advice and support over cellphones using instant messaging ,” Parker said.
With Debt Breaker consumers will be able to get free advice with regard to debt-related issues and practical remedies will be suggested.

Debt Breaker needed a reputable Debt Counselling organisation with a strong national footprint to manage all the referrals generated through this free and confidential service.

According to Jean Botha, CEO of Debt Restructuring Services (DRS) the company is excited about partnering with Debt Breaker and to be taking their message of hope to this largely untapped market.

With South Africa‘s largest mobile instant messengers (MXit, Mig33, The Grid, Fring) boasting combined numbers of over 15 million users of which the majority are between the ages of 18 and 35, it presented itself as an ideal medium to support the masses,” Says Botha.
We believe that the South African consumer is still largely unaware of their legal rights when it comes to dealing with debt. They don’t realise that the law has been changed to protect and assist them and that debt counselling and the debt review process holds a myriad of advantages for them. By associating with the Debt Breaker team we are encouraging open discussion on the topic and letting people know that there is a viable get-out-of-debt option available to them. We are hoping that a faceless, nameless, safe space to communicate will encourage more people to reach out for help

Together DRS and Debt Breaker will strive to break the stigma attached to financial difficulty and provide a lifeline to a nation in need of workable debt solutions. This service, which is the first of its kind in the world, can be accessed by doing the following:

To add Debt Breaker on MXit:
- Add Contact
- Select Google Talk
- Google ID: debtbreaker
- Nickname: Debt Breaker
- Accept Contact

Other Applications and on Google Talk

The contact can also be added using other chat applications (Fring, GTalk, Mig33, Pooosh, NimBuzz etc.). Add the contact as a Google Talk contact debtbreaker@gmail.com

If you would like to speak directly with a debt counsellor in your area call DRS on 0861 000 748.

Sunday, September 6, 2009

Millions on brink of despair

By Eleanor Momberg

More and more South Africans are being left without lights and water as they struggle to pay utility bills.

Debt counsellors, customers and economists believe the 27 percent increase in the price of electricity in 2008, a 31,5 percent minimum increase this year, as well as the climbing cost of water, rates and taxes, sanitation and refuse removal are driving consumers to the brink of despair.

Municipalities, on the other hand, blame the recession for the increasing number of account defaulters.

While debt counsellors are able to assist heavily indebted consumers to solve their financial problems, municipalities offer only limited help, cutting off electricity and water supplies to customers who are in arrears if they fail to pay their bills on time.

Municipalities are among the incidental credit institutions excluded from national credit legislation designed to protect consumers, giving them the power to decide whether to enter into arrangements with customers who fall on hard times or not.

This has prompted calls from debt counsellors for the inclusion of municipalities in the National Credit Act as they struggle to deal with increasing numbers of clients wanting help in paying their arrears municipal accounts.

According to unaudited figures released by the National Treasury this week, consumers owed municipalities R50,4-billion at the end of June. Metropolitan municipalities were owed a total of R29.4bn - an increase of R2,8bn, or 10,4 percent, on the same period last year. The City of Johannesburg was owed the largest amount, at R9,1bn, followed by Ekurhuleni at R6,8bn and eThekwini and Cape Town at about R4,5bn each. Consumers owed other municipalities R8,3bn, an increase of 36,6 percent, or R2,2bn, on the corresponding period last year.

Consumer Assist said that 1,3 million South Africans had fallen into arrears between June 2007 and July this year, with 100 000 under debt review. New applications for debt counselling had grown to 10 000 a month, and 150 000 consumers were expected to be under debt review by Christmas.

The National Credit Regulator said those under debt counselling owed R20bn to creditors - R12bn of which was owed for mortgages.

Problems

Andre Snyman of Consumer Assist said there had been a definite increase in the number of people owing municipalities large amounts of money.

"We are dealing with more and more such problems, and we are seeing more and more people being cut off," he said.

Clients owed thousands. In one instance, a person earning R12 000 a month owed the Tshwane Metro R7 261, while another earning R9 932 monthly owed R8&nbp;653.

A Germiston single parent owed the Ekurhuleni Metro R36 294. She was able to afford an instalment on the arrears of about R175 a month, but the amount charged by the municipality in interest on arrears and administration doubled that.

Snyman said despite arrangements with their municipalities to pay off the arrears amounts, all three clients experienced regular disconnections.

Christelle Steyn, a debt counsellor, said she had found that while municipalities were prepared to assist clients directly, they continued to use bully tactics to recoup outstanding money.

In Tshwane, for example, clients who had made arrangements to pay off their debts continued to have their power cut, forcing those already under debt review to fork out 60 percent of the arrears amount before the lights would be turned back on.

"The municipalities may agree to help, but they want large amounts of money over a short period, not small amounts over the long term. This makes it impossible for people who are heavily indebted to meet their commitments. If we could negotiate on behalf of our clients and show them there really is no money and this is what they can afford to pay monthly, it would help."

Steyn said in her approaches to municipalities she had indicated that the client would meet monthly obligations, paying an additional small amount towards the arrears account. But this was not accepted.

"The dramatic increase in the price of electricity, water, rates and taxes, has made it worse. It has increased the debt burden. What must our clients do? They are really struggling. Electricity accounts play such a large role, because it is one of the things that people can't live without," she said.

Snyman and Steyn want municipalities to include debt counselling in their financial processes, such as was recently done by the Ekurhuleni Metro, as they believe it would contribute to alleviating the debt crisis.

Azar Jammine, chief economist at Econometrix, said municipal debt had become a fairly substantial portion of monthly household expenses, with increases in the price of electricity and water having an impact.

"It means people are being forced to settle their utility accounts before they pay the banks."

He agreed that municipalities held the monopoly, saying if you owed money to a debtor you were able to come to some agreement to pay later.

The problem with public sector service costs was that the service was cut the moment the customer failed to pay. "This makes people feel absolutely impotent," he said.

"The problem at local government level is the skills shortage, the high level of incompetence and corruption. This is driving people to extremes," he said referring to the suicide of a man in KwaZulu-Natal after the Pinetown Home Affairs office refused him an ID document.

Lousy...

Virgil James, City of Joburg spokesman, and Antoinette Mostert of the City of Tshwane blamed the increasing non-payment of utility bills on the recession.

"The global economy is lousy and is affecting everybody," James said. "People have lost their jobs. We have over the past few months seen a trend in defaulting and believe this is attributable to the economic recession, because people cannot afford to meet all their commitments. It is not so much a decision not to pay as a case of not being able to pay. It is a difficult situation," he said, pointing out that Joburg was reviewing its expanded social package that granted the indebted 100 percent rebates on rates and sanitation.

"We are seeing where we can assist, but we also have to be realistic, because we have to collect revenue as normal. That is why we have reprioritised our spending, with some projects no longer being implemented... (we are) looking at national government, from which we get our big grants, (to) complete larger commitments, such as those for 2010."

James conceded that electricity price increases had affected customers, adding they had also affected municipal income, of which the bulk came from rates and taxes, water and electricity.

Source: IOL

Thursday, September 3, 2009

UAE bank launches debt counselling service

Dubai: With consumers increasingly feeling the pinch of the economic slowdown, a UAE bank launched a unique debt counselling service for its customers facing difficulties in managing their financial condition.

Mashreq Bank, which has launched the country's first of its kind service, has been set up to help individuals and SME customers restructure their outstanding cards, loans and facilities, easing the pressure of re-payment worries.

"Over the past few months an increasing number of customers have come to us for financial counselling and support. Their concerns have risen from a multitude of issues including; job loss, reduction in salary, personal issues, investments that have been affected by the financial situation or simple over leveraging," Head of Retail Banking Group (Mashreq) Douglas K Beckett said.

The service, which has been named 'Mashreq Assist', will alert the customers at an early stage. It encourages customers to feel confident about openly discussing their financial concerns with the bank.

"We understand that managing finances in these difficult times can be quite a challenge with unexpected situations arising. Our ultimate goal is to support our customers and give them the counsel and advice they need," Head of Retail Assets (Mashreq), Niranjan Mendonca said.

Source: The Financial Express

Wednesday, September 2, 2009

DRS Ladies off to a fun luncheon!

On Wednesday 2 September 2009 all the ladies at DRS Head Office were treated to a ladies lunch at the local Mint Deli in Port Elizabeth.



Finding a balance on banks role in recovery

FIRST we spend months congratulating ourselves on how well our banks survived the global financial crisis. Then we turn around and tell them they aren’t taking enough risk and must lend more in order to help SA out of recession.

That, in effect, is what the government is doing in what Economic Development Minister Ebrahim Patel describes as “constructive conversations with the big four banks to see what is possible in the flow of credit to various sectors of the economy”. This is all part of the recession rescue package the government, business and labour have been working on: the CEs of the big four banks were summoned to Nedlac last month to talk about their lending.

But the idea seems to be that the public sector, through guarantees or through development finance institutions such as the Industrial Development Corporation, should take at least part of the risk of loans to companies or households in distress. The Banking Association emphasises that any such lending must not be at the expense of banks’ commercial viability.

And it should not. The money banks lend isn’t theirs : it belongs to depositors, retail or corporate. And in countries where banks have had to be bailed out, citizens have often been hit twice: they’ve lost on their deposits and their tax money has gone into rescue packages for failed banks. So no one should want banks to take excessive risks on their lending books. Nor should the government be blaming banks for being cautious in the midst of a recession when, not long ago, it enacted the National Credit Act in an effort to prevent lenders making loans to those who can’t afford it .

For all that, there is a real concern that the ultra- prudent approach the banks have adopted over the past year has made the recession worse. And there is frustration that monetary policy is not stimulating the economy as it should, because the tighter lending criteria banks have been applying have served to neutralise some of the effects of the interest rate cuts we’ve seen since December. The Reserve Bank’s latest credit figures show just how minimal banks’ lending growth has been, with credit to the private sector up only 3,4% in the year to June.

Banks say much of the slowdown in lending has been driven by clients trying to cut their borrowings in response to concerns about retrenchments and shrinking order books and who aren’t even asking for more credit. Standard Bank reported at its interim results, for example, that applications for mortgages had more than halved in the year to June .

But whatever the reasons, it is clear that just as banks tended to keep their collective foot flat on the accelerator during the boom, so they now have it flat on the brake in the recession. Perhaps they are overreacting to what they see as a much riskier environment. But that’s not unusual. Banking tends to be pro-cyclical in this way, with banks pumping credit into the market in the good times, amplifying economic booms, but cutting back sharply as risk rises in bad times and so making downturns deeper.

One of the proposals put forward internationally to improve financial regulation in the wake of the global crisis is that banking regulators should adopt a more countercyclical stance, to help smooth boom-bust cycles in the financial and real economies. So, for example, banks would be required to put aside an increasing amount of capital in boom times, when risk is seen to be low and credit is expanding rapidly. But some of this capital could then be released in tough times, allowing banks to open the taps, despite higher levels of risk.

The latest round of bank results shows SA’s banks have in fact raised their capital ratios, to well above the regulatory minimum, in response to higher levels of risk. In theory, relaxing the requirements would enable them to boost lending. In practice, though, SA’s banking regulator had already done some countercyclical regulating in the boom, when capital requirements were pushed up . Now regulators everywhere are tightening up , so our banks could be at a disadvantage to international competitors if we were to go countercyclical on capital, when everyone else was going the other way. So there are no easy solutions. But if the government really is offering to share some of the risk of recession rescue, banks surely won’t turn it down.

- Joffe is senior associate editor.

Source: Business Day

Tuesday, September 1, 2009

150,000 consumers under debt review by Christmas 2009

CONSUMER debt is spiraling, with 150000 consumers expected to be under debt review by Christmas, the National Credit Regulator said yesterday.

The NCR said the 100000 consumers currently under debt counselling owed R20-billion, of which R12-billion was mortgages.

Liberty Life consumer economist Tendani Mantshimuli said: “The point here is that people are highly indebted. These figures are not surprising, given that the economy is very weak at the moment.”

Even if the economy began a slow recovery, for at least 18 months there would be a rising number of consumers applying for debt relief.

“There is a lag between the economy lifting and the personal circumstances of individuals improving,” said Andre Snyman, chief executive of debt counselling company Consumer Assist.

“At present we are seeing more hardship, not less,” he said.

Snyman said people were only now coming forward for debt counselling. “They have been using their reserves, for example, their savings and investments, but now they have no other choice but to get help through debt counselling,” Snyman said.

He said consumers attempting to address their over-indebtedness were experiencing delays because there was a 10000-case logjam before magistrate’s courts.

The NCR’s Peter Setou confirmed that 1.3-million South Africans had fallen into arrears from June 2007 to July 2009 with 93000 under debt review — affecting R12-billion of mortgages or R20-billion debt in all — and at a rate of 10000 new applications a month.

He said the number of those under debt counselling was expected to reach 150000 this year.

When the National Credit Act came into effect in June 2007 there were seven debt counsellors nationwide; there are now more than 1000.

“The National Credit Act is fairly new to South Africa. What we’re seeing here is the system being established,” said Dawie Roodt, an economist at the Efficient Group.

Mike Schussler, of Economists.co.za, said the amount of debt in South Africa was “staggering. We’ll continue to see people getting into trouble, even with our lower interest rates.

“We as a society are probably going to be more cautious about the amount of debt we use in the future,” he said.

“I think job losses will continue until the first half of next year,” Schussler said. “Until we get past that we will continue to see an increase in the number of people getting into trouble.

“We’ll start seeing a slowdown in over-indebtedness in the third quarter of this year. Debt counselling will be under pressure for a while. While counselling will work for some people, others will habitually take on debt.”

Franciscus Haupt, director of Pretoria University Law Clinic, said debt was a factor of privilege.

“The poor are coping, they’ve learnt how to do it over many periods. Usually debt is the result of the ostentation of the nouveau riche.”

Haupt said on average those applying for debt counselling at the Law Clinic had 10 creditors, “some have as many as 16”.

Snyman said on average those applying for debt counselling nationwide had an average of 13 creditors.

He said the University of South Africa agreed debt was a disease of affluence, with research showing those most indebted earned R700000 a year or more.

Source: The Times
In 2002 South Africans were R360 billion in debt.

In 2009 about 60 million people have in total R1.1 trillion worth of debt.

Debt Counselling is a Government Initiative to help both the companies and the people who owe them money out of this situation. The idea is to keep the ball rolling, instead of an entire economy falling apart.