A study has revealed that low-income earners do not understand the purpose of the National Credit Act, which was recently enacted.

A study has revealed that low-income earners do not understand the purpose of the National Credit Act, which was recently enacted.

The research, by the pan-African micro-financier, Blue Financial Services (BFS), revealed that more people did not know the intentions of the act, despite it being widely publicised in the media.

According to the research results, some people believe the government implemented the act so it could pay back the loans it received from the financial institutions.

Another perception was that the government would write off the debts of poor people and take defaulters' names off the credit bureau's blacklists.

BFS chief executive, Dave van Niekerk, said, despite these perceptions, people were positive about the act.

"To them, the act would make loans more accessible while relieving fears of being blacklisted," he said.

The study was conducted to assess the implications of the act on the man on the street, was carried out among the low and middle income groups.

"BFS felt the implications of the act on the credit industry had been extensively discussed and researched, but wanted to know what the person in the street thought of it," said Van Niekerk.

"The more negative the responses, the more people will be driven to the informal and notorious moneylenders."

The survey also found women took fewer and smaller loans.

"The research also showed that people in our target market were positive about their futures and that of their children," said Van Niekerk.

"Many are borrowing money to further their education, while others intend borrowing to pay for drivers' licences and buying vehicles."

Van Niekerk said it was important that consumers be educated on the intentions of the act and about being responsible users of credit.