Johannesburg — WHILE the growth in credit had slowed due to the implementation of the National Credit Act, SA was still a nation "trapped in debt", National Credit Regulator chairwoman Pansy Tlakula said yesterday.

Tlakula said there were 360000 debt-stressed South Africans, and the courts were passing default judgments against 80000 South Africans a month.

She would not give the latest credit figures as they were being compiled, but indications were that fewer loans were being granted.

Tlaku la said that, while the act had played a role in bringing down the number of loans granted, the recent interest-rate hike could also have affected credit growth.

The regulator and the trade and industry department were in talks aimed at beefing up its 500-strong debt counsellors to assist debt-stressed South Africans in restructuring their debts, she said.

Tlakula said the effective implementation of the act depended on the ability of debt-stressed people to get debt counselling, among other measures.

"Five hundred people are not enough for this exercise. It is important to increase the number of debt counsellors so that the overindebted people can be assisted in getting out of debt," she said.

The South African Banking Association said recently that it was planning to introduce an industry-driven and voluntary debt-mediation mechanism to complement the regulator's activities.

The regulator was satisfied with preparations by lenders ahead of the implementation of the act said Tlakula.

She also said that she was confident that in the medium to long term the social effect of high indebtedness would be reduced.

"Banks need to be commended for putting a lot of effort and resources into ensuring that their systems and procedures were fully compliant with the (act)," she said.

Tlakula said 4090 lenders had been registered under the act, and she was not worried about informal activities as the law would be applied ruthlessly to unregistered lenders.