LENDING lobby group MicroFinance South Africa has not
abandoned its bid to challenge regulations placing limits on interest
charged on loans and has vowed to fight on in court until it gets a
concession.
The organisation has taken steps to apply for an urgent review of a May judgment that ruled in favour of the Department of Trade and Industry.
The organisation’s CEO, Hennie Ferreira, told Business Day the legal process was "ongoing".
The Department of Trade and Industry and the National Credit Regulator "have asked for an extension to respond to our affidavit". The matter would be heard again in October, Ferreira said.
The organisation had initially filed an urgent application at the High Court in Pretoria in May to interdict the department and the regulator against implementing the regulations.
The court action came six months after Trade and Industry Minister Rob Davies had introduced new caps on the interest rates lenders are allowed to charge for unsecured credit.
Judge PA Meyer threw out the application and advised the organisation to petition the judge president to look into the matter.
Ferreira argues that, should the credit caps remain, 35% to 50% of the organisation’s members would go out of business. The organisation represents nearly 30% of microfinanciers and has 487 members operating across the country. Most of its members specialise in short-term unsecured credit of up to R8,000.
In June, the regulator’s quarterly update showed that short-term credit had dipped from R4.49bn to R3.21bn.
Ferreira said the trading environment remained tough.
The organisation has taken steps to apply for an urgent review of a May judgment that ruled in favour of the Department of Trade and Industry.
The organisation’s CEO, Hennie Ferreira, told Business Day the legal process was "ongoing".
The Department of Trade and Industry and the National Credit Regulator "have asked for an extension to respond to our affidavit". The matter would be heard again in October, Ferreira said.
The organisation had initially filed an urgent application at the High Court in Pretoria in May to interdict the department and the regulator against implementing the regulations.
The court action came six months after Trade and Industry Minister Rob Davies had introduced new caps on the interest rates lenders are allowed to charge for unsecured credit.
Judge PA Meyer threw out the application and advised the organisation to petition the judge president to look into the matter.
Ferreira argues that, should the credit caps remain, 35% to 50% of the organisation’s members would go out of business. The organisation represents nearly 30% of microfinanciers and has 487 members operating across the country. Most of its members specialise in short-term unsecured credit of up to R8,000.
In June, the regulator’s quarterly update showed that short-term credit had dipped from R4.49bn to R3.21bn.
Ferreira said the trading environment remained tough.
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