[Here is another tit bit for South Africans: Watch out for this new Law which the ANC is going to introduce, probably in March 2006.

It is called the National Credit Bill.

This is going to be a very freaky law which could cause some serious problems in the years to come.

I’ve not studied the details of it yet – but it is relevant to my line of work, and I will have to familiarse myself with it. I know a number of people who have studied it, and they think it is wild.

Here’s how it will work:
The ANC is out to nail banks who do not loan money to some of the blacks. The ANC is basically out to prove that Commercial Banks are discriminating against blacks.

As you know, the ANC has already engaged in some serious madness by suggesting that all Black Listing of defaulted debts be completely written off by credit bureaus. (Why? Because most defaulters are Black!)

Well, there’s more to this and I can’t help wondering how much this will damage our banking industry (and perhaps affect our bank charges?).

The legislation will force all banks to keep records, for 5 years, of every single loan application made – even if it is REJECTED. (So that is the first cost which will be added to the banks).

When a credit/loan application is rejected, the bank will have to state clearly, in its records WHY it rejected that loan/credit.

If the rejected applicant then feels that he/she was discriminated against due to colour, poverty, or whatever, they will be able to take the bank to a special court (yet to be set up). That court will then pass judgement and if necessary fine the Bank for discrimination! (The ANC loves fining businesses!)

Now keep in mind that the setting up of yet another massive bureacratic legal system complete with courts across the country is going to cost a ton of money.

The bottom line is that if a Bank feels that a possible customer is a credit risk BECAUSE THEY ARE BLACK or BECAUSE THEY HAVE A LOW INCOME… then that bank is going to be nailed to the wall by a rejected applicant!!

So the way I see it, the Government is going to force banks to loan money to high-credit risk people! People I know are predicting that it will cause defaulting debtors to shoot sky high! And who pays for the defaulters? Well… the honest people, who pay their debts will end up footing the bad debts of the defaulters – that’s what will happen in the end!

Now remember what the ANC did to Labour law hey? They created that Labour Courts (CCMA), and they stuffed up the labour situation to such a degree that foreign investors wouldn’t touch this country due to its freaky labour laws!

The ANC’s Labour Laws COST A LOT OF MONEY to all the businesses across this country. I know for example, that because of these racial quotas, that now companies are making strange decisions which go like this: Do they (a) Fire Whites or (b) Hire more blacks – just to get the racial quotas right? Its happening. I’ve heard of Whites being asked to retire early to get the racial quotas right because otherwise, they have to hire more blacks and that costs even more money!

Back to the National Credit bill:-
Well, here is the next super-stuff-up coming – where they will meddle in the actual business of the banks. They will meddle with the risk factor and increase the bad debts of banks. Furthermore, by wiping the credit records away, they will make it even harder for the banks to determine who is a good credit risk and who isn’t.

So I would think the banks’ profitability is going to suffer.

Of course, the banks will scrutinise the law with their legal departments and maybe they will spot loop holes, and maybe for some months or years they will be able to survive. But, if the ANC eventually closes those loop holes, expect it to really have a negative effect.

So this is one mother of a crazy Black-Racist Law that is coming our way and it will hit the entire financial industry.

A co-worker was telling me that he heard an interview on the radio where someone predicted that all these ANC laws will ultimately cause the destruction of corporate business in S.Africa. That ultimately, big corporations will be destroyed/put out of business and replaced with lots of small businesses – many of whom, will be able to bypass the crazy laws that apply to the big businesses.

This is a definite possibility.

What interests me is watching how the financial burdens of the big businesses are constantly increased. The ANC laws cause them to spend more and more money. They have to hire blacks whose productivity is low. Then they tie them up with many other laws on racial quotas, on courses, and on many other things. The net result can only be that corporations will become less and less profitable as the years go by. Corporations and large businesses will become (a) More bloated (b) Less efficient (c) less profitable.

So, will this result in the prediction made on the radio, coming true? Will blacks end up dominated and taking over Big Business, only for Whites to sneak out and start small, profitable niche businesses which support them? This person predicted that South Africa in the future will become like it was in the 1960’s – it will go back to having lots of small businesses. There will no longer be huge chains of supermarkets. You will have lots of small independent businesses instead.

This is a fascinating possibility.

It does raise the issue as to whether, in the end, the ANC’s laws will work, or whether the Whites will find new ways to survive, and the blacks will end up with huge, bloated, inefficient, low-productivity businesses which might then actually hit the wall and go bankrupt!? Could this be?

This will be a fascinating one to watch. I am extremely intruiged.

As I learn more about this, I will update people about its implications. Jan]