The National Credit Regulator (NCR) has stepped in to investigate a case of alleged reckless lending against Nedbank after reading about it in the press. Moneyweb previously reported that retired education specialist, Myrlene Pieterse, approached the Ombudsman for Banking Services on behalf of a financially uneducated employee, contending that Nedbank engaged in reckless lending practices by not adequately explaining the implications of the credit.

The employee, who cares for Pieterse’s 94-year old mother, is experiencing financial stress. She received a personal loan of R30 182 from Nedbank, roughly 5.5 times her average monthly salary at an interest rate of 35.4%, which has to be repaid over a period of four years.

She was also granted two credit cards, notes the Moneyweb report.

It notes Nedbank previously said it could not comment on individual cases due to legal considerations, but that it was committed to promoting a fair and transparent credit market. In a letter to the ombud, a Nedbank official argued that the interest rate was in line with the guidelines of the National Credit Act at the time, that an appropriate credit assessment was done and that it did not believe the credit was granted recklessly. Lebogang Selibi, media relations officer at the NCR, reportedly confirmed the regulator was investigating.

Full Moneyweb report