April 2009

The National Debt Mediation Association (NDMA) is the new kid on the block in the fight against debt. The National Credit Regulator (NCR) and other credit providers have established the NDMA as a separate non-profit association for a collective effort to combat over-indebtedness of consumers, including housing debt and other forms of credit.

The association will deliver a free, confidential service, offering advice and resources to consumers who are worried about debt. It hase also negotiated agreements with Debt Counsellors and Credit Providers to offer significant concessions to assist in over-indebted consumers.

Consequently, the NDMA will restructure as much of consumer debt as possible including bank debt and retail debt. The NDMA’s mandate to “help and relieve over-indebtedness one person at a time” is two fold:

1. To facilitate and promote collaborative interventions between credit providers, debt counsellors and PDA’s (Payment Distribution Agencies) to enable fast, efficient and effective resolution of debt counselling cases.
2. To act as a way for the collaborative execution of certain provider obligations under the NDMA Credit Industry Code to combat over-indebtedness.

The benefits for debt counsellors and credit providers to be affiliated with this association are:

• It allows for joint problem solving and trusted mutually agreed outcomes.
• Delivering an improved service to consumers and increasing profitability for debt counsellors and credit providers
• All affiliated parties can engage in one structure with the agreement binding so that no individual battles with consumers need to be fought.
• It brings certainty and fairness in the dispute resolution process.
• It avoids costly litigation or NCR conflicts.
• Direct referrals become possible by using a helpline and website referral framework.
• There will be much more compliance resulting in a broad sharing of the obligation of the associations’ code of conduct.

Consumers who identify with the below set of concerns should consent to enter the six step programme to debt relief:

• 17.53 million South Africans are credit active with 61 million credit accounts, or around 3.5 accounts per credit active consumer
• 40% of these accounts are delinquent
• At the end of January 2009 around 48 000 cases of over-indebted have been registered with the NCR
• The industry estimates this will increase to 200 000 by mid 2009

Consumers who meet their restructured obligations will rehabilitate their financial situation using repayment term rescheduling, interest rate and fee reductions and a temporary break in repayments. Once agreed, this will be put into effect by an NDMA-affiliated Debt Counsellor.

Should you have any questions or comments that you would like to share with us about the above article please do not hesitate to contact us on Tel: 021 888 6000 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it . or contact the NDMA on 086 111 6362 or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or visit www.ndma.org.za.