NCA’s inclusion of educational institutions is a death knell for student credit records
Statement by Lucia Matomane, UDESMO Eastern Cape Provincial Chairperson
The United Democratic Students’ Movement (UDESMO) in the Eastern Cape is deeply troubled about the Department of Trade, Industry and Competition’s, proposed amendment to the National Credit Act (NCA), which seeks to include educational institutions as data sources for credit reporting.
We strongly oppose this amendment and its potential consequences for South African students and graduates.
South Africa is already facing an unprecedented unemployment crisis, with graduates forming a significant part of the jobless population. Many young people, despite having completed their studies, remain unemployed and unable to service their crippling student debt.
Instead of addressing the structural challenges that hinder youth employment, this amendment risks trapping graduates in a cycle of debt and financial exclusion.
There is also a very real risk that negative credit records arising from unpaid student debt could prevent graduates from employment opportunities, particularly in the financial sector and other industries where a clean credit record is required. This policy could worsen youth unemployment and deny poor and previously disadvantaged graduates, access to already limited economic opportunities.
Education must serve as a pathway to empowerment and upliftment. Instead, these proposed credit measures will deepen inequality and effectively oppress the financially vulnerable and economically marginalised youth, closing the door to economic participation and social mobility.
The NCA is threatening to kill the future of our generation. Young people who wish to start businesses risk being blacklisted at the very beginning of their journeys, with their futures destroyed before they even have the chance to build them.
As UDESMO Eastern Cape, we stand firm in advocating for fair and transparent credit practices, greater financial education, and meaningful support for vulnerable students. We call on policymakers to take into account the unique challenges students face and to work towards creating a more inclusive, just, and supportive financial environment that empowers rather than cripples young South Africans.
The UDESMO Eastern Cape therefore calls for the withdrawal of this amendment and for the Department of Trade, Industry and Competition to engage with stakeholders on solutions that address the root causes of graduate debt and unemployment, such as debt relief measures and sustainable pathways to employment.
South Africa’s future cannot be built on the financial exclusion of its youth.
