It’s easy to get excited at the prospect of something innovative happening and the impact it has on the status quo. Take for instance debt forgiveness and the current drive to relieve over-burdened consumers of their debt.
Debt relief or debt forgiveness … when customers settle their debt at an amount below the total outstanding amount due to the creditor …
Debt relief occurs either through a formal legal mechanism or a consensual agreement between the customer and the credit grantor. While the effort to formalise legislation to provide relief to over-indebted customers is new, debt relief through consensual agreement is not.
The secondary market for the sale of non-performing loans (“NPL’s”) has existed in South Africa for many years. Secondary Market … is the market in which the original credit grantor (e.g. bank or retailer) of a loan to a customer (an individual or a corporate entity) sells the credit agreement to a registered third party credit provider … NPLs are sold when the prospect of rehabilitation of the customer relationship and further credit extension is no longer likely.
Credit grantors are often unable to offer over-indebted customers the benefit of meaningful discounts as a mechanism to settle a customer’s outstanding debt due to the risk of contagion across their loan portfolios. Contagion … the unanticipated domino effect that an isolated action may have … Performing customers could quickly learn that holding out on paying their outstanding debt would result in them
receiving discounts which would impair a credit grantor’s balance sheet. This risk is controlled by credit grantors through the sale and transfer of NPL to a third party debt acquirer.
NPL transactions are a key part of a well-functioning macroeconomic environment for any market economy, and they give rise to a critically important socio-economic benefit … large scale debt relief!
Credit grantors annually sell NPL’s in excess of R20 billion and in return receive new capital in the region of R1 billion. The NPL acquirer will likely only ever recover a maximum of R2 billion, leaving the remaining outstanding debt balance of R18 billion subject to debt relief . . . Yes, that’s 90% debt forgiveness! This debt relief is standard industry practice and driven by natural free market forces.
Government is creating a legislated debt relief framework which assists over-indebted consumers earning below R7, 500 per month with unsecured debt of less than R50, 000. The debt relief offered in the secondary market works in tandem with the legislative framework, and offers debt relief to all over-indebted customers including higher earning over-indebted customers. It is highly efficient, administratively light, places a zero cost on the state for its implementation and execution, and will continue to benefit consumers in the years ahead!
Written by Peter Watson – Executive
St Agnes is a public school situated in Woodstock, Cape Town.
Nimble Group actively supports St Agnes Primary School through the Partners for Possibility programme. We dedicate resources to a variety of initiatives aimed at creating an enhanced learning and recreational space, enriched student experience, and optimized day-to-day running of school operations.
Computer room upgrade Our dedicated team of IT technicians has upgraded the school’s IT hardware and software, creating a more user-friendly and modern environment for students and teachers using the computer room daily.
Playground painting and revitalization
Our enthusiastic volunteers devoted their time to painting vibrant murals and interactive games on the walls and paved areas of the playground.
Enriched student experience
Nimble strives to continuously improve the student experience by celebrating academic excellence, sponsoring prize-giving events, and more.
Day-to-day operational support
We also contribute to the school’s operational efficiency by offering administrative support and providing access to Nimble’s HR and Finance functions.
Nimble Group has taken the initiative to establish an Early Childhood Development Centre, which began operating in January 2019 in Woodstock, Cape Town. The centre operates under the guidance of Peak child, and while accessible to the public, primarily serves as a subsidized preschool for the children of Nimble staff.
Peak Child aims to equip children with the best possible foundation for life by providing affordable, high-quality preschools in close proximity to workplaces, catering to the needs of emerging middle-class parents. Since its inception, Peak Child has focused on collaborating with socially responsible employers to support their staff beyond conventional employee benefits.
Peak Child offers comprehensive programmes for children aged 3 months to 5 years. Through partnerships with prominent educational experts and local primary schools they ensure that children transitioning from Peak Child are socially, academically, and physically prepared for admission to any of Cape Town’s leading primary schools. Peak Child currently operates three schools, including Peak Child Nimble.
Nimble has made a significant investment in this project, with plans to replicate this model close to its Johannesburg offices.
The Altius Et Latius Trust is a school education initiative aimed at providing bursaries to historically disadvantaged students, enabling their attendance at top schools in Cape Town.
The primary goal of the trust is to promote equitable access to high-quality public education, fostering lasting transformation. Their objective is to support fifty talented learners in gaining admission to high-performing schools.
Nimble Group continually makes a substantial impact on this crucial initiative by providing essential resources for additional student support, such as tutoring, funding for school events or excursions, sporting equipment and more.