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South Africa Tightens Lending Rules In Wake of African Bank Demise

South Africa Tightens Lending Rules In Wake of African Bank Demise

The South Africa government wants to change regulation to limit credit lending in the wake of the African Bank lending crisis that forced the country’s Reserve Bank to bail it out. The tightening in lending rules may undermine consumer spending and the recovery in Africa’s biggest economy.

“They now require that every application for credit must be properly accessed in terms of requiring proof of income and ensuring that expenses that are declared by consumers meet minimum norms,” Stephen Logan, Lawyer and consumer credit expert, told CCTV Africa.

The government has urged lenders to improve access to finance to South Africans in a bid to boost growth and curb joblessness. The central bank has kept its benchmark interest rate at 5 percent since a 50 basis point cut in July.