Retailers rally on relaxed rules


Retailers rally on relaxed rules

Published Date: 2018-03-22 | Source: Stephen Gunnion | Author: Stephen Gunnion

Retailers rally on relaxed rules

The Western Cape High Court found that parts of the National Credit Act were discriminatory and fell foul of the Constitution

Shares in credit retailers soared on Friday after the Western Cape High Court set aside rigid stipulations in the National Credit Act that require particular forms of proof of income before they can extend credit to customers. The action was brought by Truworths, The Foschini Group and Mr Price against the Minister of Trade and Industry and the National Credit Regulator.

The retailers argued that a section of the National Credit Act discriminated against South Africans, particularly in the informal sector, who did not have access to bank accounts or salary slips and therefore were unable to buy goods on credit. They said the stipulation frustrated the aim of the Act, which is to promote the development of a credit market that is accessible to all South Africans, and in particular, those who have historically been unable to access credit under sustainable market conditions.

After arguments by Norton Rose Fulbright director Lauren Fine, the court found that the regulation fell foul of the Promotion of Equality and Prevention of Unfair Discrimination Act and also contravened the Constitution. It said the onus was on retailers to assess a customer's income and whether they could afford any credit extended to them.

Lewis surged 8.2% on the news, while Truworths gained 6.3%, The Foschini Group jumped 5% and Mr Price rose 4.2%. The JSE's General Retailers Index ended 3.7% higher, helping the All Share to a 0.35% gain.

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