Extending credit to unsustainable agricultural enterprises affects the quality and quantity of aeons-old natural resources meant to support life for centuries to come. The irresponsibility of such lending is accentuated by the fact that profitable alternatives that heal the land are available.
The National Credit Act (34 of 2005) states, inter alia, that a credit agreement between a credit provider and a consumer (the recipient of the credit) can constitute reckless lending if any one of three conditions are met at the time of the agreement, or at the time the amount approved is increased.
The conditions are:
if the credit provider failed to conduct a detailed assessment before granting the credit or raising the amount, or, in the event that the credit provider did conduct an assessment, entered into the agreement despite the fact the information indicated that;
the consumer did not generally understand or appreciate the consumer's risks, costs or obligations under the agreement; or
entering into the agreement would make the consumer over-indebted.
If reckless lending did occur, the court can prescribe certain remedies to the consumer who has fallen victim to such lending practices. When determining the remedy, there must be sufficient relationship between the purpose...