Correctional Services said that “matters are under control” at Johannesburg’s Sun City Prison on Wed.
Household credit extension by banks rocketed 81 percent between January 2004 and September 2006 to R680billion, a report released yesterday by the National Credit Regulator (NCR) has found.
Gabriel Davel, chief executive of the National Credit Regulator (NCR), noted that there were indications of important changes in credit market behaviour, resulting in increased provision of finance by mainstream credit providers to lower income groups.
Davel said that this may contribute to a lowering of the cost of finance with relatively more expensive forms of finance such as micro-lending being replaced by credit card facilities. But he cautioned that credit card instruments were more complex and that undisciplined use may lead to over-indebtedness.
Davel's views echo those of South African Reserve Bank governor Tito Mboweni, who last week emphasised that in accepting credit, consumers should understand their rights and should not fall prey to the aggressive marketing of credit. The governor was speaking at a meeting of the National Consumer Forum on Thursday.
"Some of our banks have been offering people two credit cards where they can use one card and once that is exhausted they can use the other to pay off the other one. Now I don't know what madness this is to use credit to pay credit. They are just recycling debt as the other card is soon in deficit," he stressed.
The NCR report highlighted that growth in credit extended to households since January 2004 had exceed-ed household consumption growth, nominal gross domestic product (GDP) growth and formal employment growth.
Mortgages currently ac-count for 65 percent of credit to households. This category grew by R207billion, or 87 percent, over the last two years, the research showed.
Credit cards, meanwhile, account for 5,5percent of credit to households and have grown by 138percent, or R20billion since 2004. - I-Net Bridge