The cost of credit in the micro-finance industry in South Africa
- Authors: Campbell, Jonathan
- Date: 2007
- Subjects: Contracts -- South Africa , Credit -- Law and legislation -- South Africa , Microfinance -- South Africa , Usury laws -- South Africa
- Language: English
- Type: Thesis , Masters , LLM
- Identifier: vital:3667 , http://hdl.handle.net/10962/d1003182 , Contracts -- South Africa , Credit -- Law and legislation -- South Africa , Microfinance -- South Africa , Usury laws -- South Africa
- Description: This thesis analyses the cost of credit in the micro-finance industry in South Africa. The study situates micro-lending agreements within the law of contract, beginning with an examination of contractual fairness in terms of the common law: the fundamental principle of freedom of contract that underpins the common law of contract; the principle that agreements contrary to public policy should not be enforced; and the impetus given by constitutional values that inform public policy. In regard to moneylending transactions, common law usury law will be explained. The study then goes on to trace the origins and rapid growth of the micro-finance industry which was made possible by its exemption in 1992 from the Usury Act 73 of 1968. The upshot of this development was that registered micro-lenders have for nearly 14 years charged excessive interest rates, and continue to do so. The dire socio-economic impact of these high interest rates on individual consumers and lowincome communities is then demonstrated: how borrowers of small loans soon become over-indebted; the loss of billions of rands every year to low-income communities in the form of interest on micro-loans. The study then shifts to the legislative response to the need for consumer protection in regard to consumer credit. The extensive credit law review process is explained, resulting ultimately in the National Credit Act 34 of 2005, which allows the Minister to prescribe limits on interest rates and fees in all sectors of the consumer credit market. The prescribed limits on the cost of credit in the micro-finance sector are thoroughly explained and analysed, with particular reference to the implications of each element of the credit costing structure, and the combined impact of the total cost of credit on different types and sizes of loans. The envisaged maximum interest and fees will markedly alter the positions of micro-lenders and consumers, and receive careful analysis. The study closes with a summary of findings in the thesis, which includes suggested amendments to the National Credit Regulations and a review of possible legal challenges to the high cost of credit on smaller loans.
- Full Text:
- Date Issued: 2007
- Authors: Campbell, Jonathan
- Date: 2007
- Subjects: Contracts -- South Africa , Credit -- Law and legislation -- South Africa , Microfinance -- South Africa , Usury laws -- South Africa
- Language: English
- Type: Thesis , Masters , LLM
- Identifier: vital:3667 , http://hdl.handle.net/10962/d1003182 , Contracts -- South Africa , Credit -- Law and legislation -- South Africa , Microfinance -- South Africa , Usury laws -- South Africa
- Description: This thesis analyses the cost of credit in the micro-finance industry in South Africa. The study situates micro-lending agreements within the law of contract, beginning with an examination of contractual fairness in terms of the common law: the fundamental principle of freedom of contract that underpins the common law of contract; the principle that agreements contrary to public policy should not be enforced; and the impetus given by constitutional values that inform public policy. In regard to moneylending transactions, common law usury law will be explained. The study then goes on to trace the origins and rapid growth of the micro-finance industry which was made possible by its exemption in 1992 from the Usury Act 73 of 1968. The upshot of this development was that registered micro-lenders have for nearly 14 years charged excessive interest rates, and continue to do so. The dire socio-economic impact of these high interest rates on individual consumers and lowincome communities is then demonstrated: how borrowers of small loans soon become over-indebted; the loss of billions of rands every year to low-income communities in the form of interest on micro-loans. The study then shifts to the legislative response to the need for consumer protection in regard to consumer credit. The extensive credit law review process is explained, resulting ultimately in the National Credit Act 34 of 2005, which allows the Minister to prescribe limits on interest rates and fees in all sectors of the consumer credit market. The prescribed limits on the cost of credit in the micro-finance sector are thoroughly explained and analysed, with particular reference to the implications of each element of the credit costing structure, and the combined impact of the total cost of credit on different types and sizes of loans. The envisaged maximum interest and fees will markedly alter the positions of micro-lenders and consumers, and receive careful analysis. The study closes with a summary of findings in the thesis, which includes suggested amendments to the National Credit Regulations and a review of possible legal challenges to the high cost of credit on smaller loans.
- Full Text:
- Date Issued: 2007
The doctrine of duress in the law of contract and unjustified enrichment in South Africa
- Authors: Glover, Graham Brian
- Date: 2004
- Subjects: Contracts -- South Africa , Duress (Law) -- South Africa , Remedies (Law) -- South Africa
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: vital:3672 , http://hdl.handle.net/10962/d1003187 , Contracts -- South Africa , Duress (Law) -- South Africa , Remedies (Law) -- South Africa
- Description: This thesis analyses the doctrine of duress and its application in the law of contract and unjustified enrichment in South Africa. Following an initial examination of the historical development of the doctrine from its roots in Roman and Roman-Dutch law, the study focuses on the current legal position in the two areas of law under review, identifies the substantive and formal deficiencies in the current approach, and suggests, using comparative authorities, how the law might be developed. As far as the law of contract is concerned, after exposing the difficulties inherent in the current approach, and placing the doctrine in its proper context in the South African law of contract generally, it is argued that the duress doctrine finds its juridical basis in the principle of good faith. A more modern and coherent test for duress is then proposed: one that concentrates on the question whether an illegitimate threat was made, which induced a contract in that it left the other person no reasonable choice but to succumb to the proposal. Additionally, the need for South African contract law to recognise and deal with cases of economic duress is emphasised. The study then shifts to an examination of the position in situations where non-contractual performances have occurred under duress: cases that are decided in terms of the principles of the law of unjustified enrichment. The current position is reviewed, and it is shown that the approach to duress cases is substantially different to the approach that applies in contract. An attempt is made to reconcile this problem. From a structural perspective, the nature and application of the relevant enrichment action where a non-contractual performance is made under duress (the condictio indebiti) is also investigated, in the light of approaches to enrichment adopted in both Germany and England, in an attempt to make better sense of this enrichment action in the South African context. The study closes with an analysis of the various contractual, delictual and enrichment remedies that are available once a case of duress has been proved.
- Full Text:
- Date Issued: 2004
- Authors: Glover, Graham Brian
- Date: 2004
- Subjects: Contracts -- South Africa , Duress (Law) -- South Africa , Remedies (Law) -- South Africa
- Language: English
- Type: Thesis , Doctoral , PhD
- Identifier: vital:3672 , http://hdl.handle.net/10962/d1003187 , Contracts -- South Africa , Duress (Law) -- South Africa , Remedies (Law) -- South Africa
- Description: This thesis analyses the doctrine of duress and its application in the law of contract and unjustified enrichment in South Africa. Following an initial examination of the historical development of the doctrine from its roots in Roman and Roman-Dutch law, the study focuses on the current legal position in the two areas of law under review, identifies the substantive and formal deficiencies in the current approach, and suggests, using comparative authorities, how the law might be developed. As far as the law of contract is concerned, after exposing the difficulties inherent in the current approach, and placing the doctrine in its proper context in the South African law of contract generally, it is argued that the duress doctrine finds its juridical basis in the principle of good faith. A more modern and coherent test for duress is then proposed: one that concentrates on the question whether an illegitimate threat was made, which induced a contract in that it left the other person no reasonable choice but to succumb to the proposal. Additionally, the need for South African contract law to recognise and deal with cases of economic duress is emphasised. The study then shifts to an examination of the position in situations where non-contractual performances have occurred under duress: cases that are decided in terms of the principles of the law of unjustified enrichment. The current position is reviewed, and it is shown that the approach to duress cases is substantially different to the approach that applies in contract. An attempt is made to reconcile this problem. From a structural perspective, the nature and application of the relevant enrichment action where a non-contractual performance is made under duress (the condictio indebiti) is also investigated, in the light of approaches to enrichment adopted in both Germany and England, in an attempt to make better sense of this enrichment action in the South African context. The study closes with an analysis of the various contractual, delictual and enrichment remedies that are available once a case of duress has been proved.
- Full Text:
- Date Issued: 2004
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