Dentons would like to thank Henwood & Company in Swaziland for this month's contribution to the Africa section of the Dentons South Africa Newsletter.This article provides an overview of the implications of the Consumer Credit Act No. 7 of 2016 in respect of credit agreements between the credit givers and the consumers in Swaziland.
The Consumer Credit Act No. 7 of 2016 (the Consumer Credit Act) was promulgated on 10 March 2017. In previous years Swaziland relied on the Money Lending and Credit Financing Act of 1991, the Hire Purchase Act of 1969 and the Pawn Broking Act of 1894, which have since been repealed by the Consumer Credit Act. The provisions of the above Acts were structured to codify the common law regarding credit agreements, which was mainly a form of protecting the credit giver to a larger extent and the consumer to a lesser extent1.
Swaziland, like many other countries, has been working towards tailoring protection for consumers who are involved in a number of credit transactions, from hire purchase agreements to loans on interest, which it has managed to do with the advent of the Consumer Credit Act.
The regulators are determined to ensure that the Consumer Credit Act's effect is felt by all credit providers such that they have published the Consumer Credit Regulations for comment by affected parties, who mainly consist of cash credit providers and retailers selling goods on hire purchase.
A welcome move in the Consumer Credit Act is section 73, which ensures that consumer information is kept confidential and may only be released upon obtaining consent from the consumer and/or as directed by legislation, and section 100, which allows the consumer reprieve in the event that he is in default. Section 100 ensures that the consumer is given adequate notice of his default, and that the credit provider must ensure that the consumer did indeed receive the notice before instituting legal action against the consumer.
Although the Consumer Credit Act is a positive move towards the protection of consumers, it is lacking in many ways. While in South Africa the Consumer Protection Act looks at every aspect of the consumer's needs, in Swaziland the Consumer Credit Act only recognises the consumer being in danger in circumstances involving credit in any form.
The Consumer Credit Act is a new piece of legislation which has not been challenged, neither has there been case law relating to that particular legislation since its inception. However, regulators are seen to be determined to ensure that consumers are protected from any form of unfair treatment which may be born out of credit agreements that do not comply with legislation.
1. The Law of South Africa: First Reissue 5 Part 1 – W A Joubert (Butterworths Durban 1994) at paras 2-3 page 4.
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