Project synthesis

The purpose of SDC's support is to assist the Department of Justice and Constitutional Development in the establishment of a Debt Collectors Council and to launch a process aimed at transforming and reconstructing the debt collection industry in the country.

Strategy/Objectives

The debt collection profession in South Africa was not regulated and as a consequence private entrepreneurs who are not subject to any form of control made most debt collection. In response to this situation the Department of Justice and Constitutional Development drafted a Debt Collectors Act which was approved in 1998 by the South African Parliament. The Act makes provision for the establishment of a Council for Debt Collectors, which is to oversee and exercise control over the debt collector's profession and its inherent functions.

The overall goal of the SDC support is to contribute to the transformation of the debt collection system in South Africa by monitoring the conduct and professionalism of debt collectors and promoting a culture of good governance within the profession

Specifically SDC's support will allow for the Debt Collectors Act to come into operation by supporting the establishment of a self-sustaining Debt Collectors Council to regulate and monitor the debt collectors' profession.

Beneficiaries and Outcomes

As the present victims of the unregulated debt collection system are mainly poor people, the project will contribute to improve their security, and will thus contribute indirectly to poverty alleviation.

The following immediate outcomes will be achieved with SDC support: firstly, a self-sustained administrative body will be established to carry out the functions of a Council for Debt Collectors. Secondly, effective monitoring and regulatory mechanisms aimed at exercising the effective management of and control over the debt collector's profession and its functionaries will be put in operation.

Once operational, the Council will deal with the articles of the Act which focus on issues such as compulsory registration of all debt collectors, meetings of the Council, appointment of personnel, issuing certificates of registration, a register of debt collectors, improper conduct by debt collectors, trust accounts, etc. Based on present realistic estimates, the Council will be able to generate its own resources and expend its activities after this initial support.

Partner

The Council is a statutory body established by the Debt Collectors Act of 1988. The Council consists of a chairperson, a magistrate, an attorney, at least two debt collectors, one person representing consumer interests and two additional members. The Council members are appointed by the Minister for Justice and Constitutional Development.

Project duration

The project is a one time intervention which will take place from August 2002 to July 2004.

Funding
 
SDC contributes for an amount of CHF 270'000.- (ZAR 1'600'000) to cover the initial establishment, personnel and running costs of this Office.

Geographical area
 
The Council is located in Pretoria. Its activities will however extend to the entire country.

Contact address

Debt Collectors Council
P O Box 836
Silverton 0127
Tel: +27 12 804 9808
Fax: + 27 12 804 0744
e-mail: info@debtcol-council.co.za
www.debtcol-council.co.za