NCA makes example of microlender

Zweli Mokgata

Zweli Mokgata

The National Credit Act has claimed its first victim - a microlender in the Northern Cape called Frabert.

In a landmark ruling, the National Consumer Tribunal, a body set up to enforce the Act, has revoked Frabert's licence as a registered financial provider.

The company, which trades through 11 Cashwise franchise branches in the Northern Cape, was investigated by the National Credit Regulator (NCR) in the beginning of the year.

The NCR found that Frabert was holding customers' bank cards and pin codes as well as pension cards as a method of debt collection.

Jan Augustyn, NCR manager for investigations and prosecutions, said: "We issued them with a compliance notice early in January this year and did another investigation, but they didn't even show up at the default judgment against them."

If the company continues to extend credit to the public, directors could end up serving 10 years in prison and may be fined.