Credit Management SA

New Site for this Blog

2006-04-24T09:50:00.000+01:00

Please be advised that we are in the process of moving this site across to www.creditmanagement.co.za

Unfortunately subscribers will have to re-subscribed at the new website.

We hope that you will enjoy the new blog site with its additional features such as catagories and improved search facilities.

Granting Credit in Accordance with the National Credit Bill

2006-04-05T08:06:00.000+01:00

here is an interesting article by Eric Levenstein, a director of the law firm of Werksmans, on the Website FA News entitled “Granting Credit in terms of the proposed new national credit bill”. The article takes a brief look at the credit granting requirements in terms of the new bill.

The article follows:

“1 Section 80 of the proposed National Credit Bill sets out new parameters with regard to assessing whether the grant of credit to a consumer was made on a reckless basis. The subjective nature of the grant of credit has for many years troubled retail institutions and companies running their operations based on their target customers receiving credit from such organisations.

2 The provisions of the bill will impact on each and every company engaged in the grant of credit and which will require businesses and companies engaged in the provision of credit to keep themselves informed and updated relevant to this new legislation and its future impact and development in the South African economy.

3 The aim of the bill relating to the grant of reckless credit, is to ensure that consumers are not drawn into applying and agreeing to the provision of credit when they will not be in a position to service that credit line in the future and which will result in a situation where such consumer becomes over-indebted.

4 In terms of section 79 of the Bill, the consumer would be over-indebted if he or she would be unable to meet, in a timely manner, all obligations in respect of all credit agreements entered into by such consumer with credit providers.

5 In terms of section 79(1), a consumer would be over-indebted -

“If the preponderance of available information at the time a determination is made indicates that the particular consumer is or will be unable to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, having regard to that consumer’s -

(a) financial means, prospects and obligations; and

(b) probable propensity to satisfy in a timely manner all the obligations under all the credit agreements to which the consumer is a party, as indicated by the consumer’s history of debt re-payment.”

6 The evaluative measures which each credit provider will have to consider in due course, may be pre-approved by the National Credit Regulator or, in time, could follow non-binding guidelines issued by the National Credit Regulator.

7 Section 78(3) defines what is meant by “the financial means prospects and obligations” with respect to a consumer. An assessment will have to carefully be made in respect of the consumer’s monthly income, or any right to receive income, regardless of the source, frequency or regularity of that income and will include income earned by other adult persons within the consumers immediate family or household. In addition, section 78(3)(c) will deal with the situation where a consumer applies for credit for a commercial purpose and which will require the credit provider to assess the reasonably estimated future revenue flow from that business purpose.

8 The “financial means test” would require a consumer to provide proof of income, expenses, budgets for household and general expenses, SARS returns, a list of assets and liabilities and of all existing credit agreements.

9 The Courts will in time determine whether or not there has been a realistic and fair assessment when assessing whether or not there has been a grant of reckless credit.

10 Section 80 determines when the provision of credit has been reckless. In terms of section 80(a), such credit would be deemed to be reckless when the credit provider failed to conduct an assessment, as required by section 81(2), irrespective of what the outcome of such an assessment might have concluded at the time. In terms of section 81(2), the credit provider must not enter into a credit agreement without first taking reasonable steps to assess the proposed consumers general understanding and appreciation of the risks and costs of the proposed credit, and of the rights and obligations under such credit agreement. In addition, the debt repayment history of such consumer under credit agreements will have to be assessed.

11 In terms of section 80(b) the credit agreement will be deemed to be reckless if the credit provider, having conducted an assessment and despite such an assessment, enters into a credit agreement with the consumer despite the fact that the preponderance of information available to the credit provider indicated that -

11.1 the consumer did not generally understand or appreciate the consumers risks, costs or obligations under the proposed credit agreement; or
11.2 by entering into that credit agreement such consumer would become over-indebted.

12 In terms of section 85, a court may declare and relieve over-indebtedness by -

12.1 referring the matter directly to a debt counsellor with the request that the debt counsellor evaluate the consumers circumstances and make a recommendation to the court in terms of section 86(7);
12.2 declare that the consumer is over-indebted and make any order as contemplated in section 87. In terms of section 87, the court may rearrange the consumer’s obligations, alternatively, declare that a credit agreement is reckless.

13 In a recent report of the World Insolvency Organisation, INSOL, it is stated -

“Financial literacy can be taught; it is essential for successful functioning in our world’s economy, where money is the key factor and a lack of money is regarded as a failure. Education is therefore an integral part of a genuine fresh start, as it enables the debtor to function more effectively in society.”

14 Unfortunately, in South Africa, for a lengthy period of time too many people with too little money have been given too much credit. This ultimately leads to a position of over-indebtedness and which results in a never ending circle of frustration for the consumer who can never repay his debts.

In my view, the bill introduces new parameters for the grant of a credit in South Africa which will in the long term ensure that consumers will be in a position to relieve over-indebtedness and avoid the grant of reckless credit.”

The Right of a Creditor to Realise a Debtor’s Property

2006-04-03T08:06:00.000+01:00

The right of a creditor to realise the property of its debtor without first obtaining the sanction of the court is called parate executie in our law.

This right has now been challenged by the Constitutional provisions of Section 34 of the Constitution, which provides that:

'Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum.'

Initially the case law on the subject seemed to suggest that a creditor’s right of parate executie had been taken away but the matter has now been resolved in the Supreme Court of Appeal’s decision in the judgment of SA Bank of Athens Ltd v Van Zyl 2005 (5) 93 (SCA).

In this case the court ultimately held that:

1. parate execution is not per se unconstitutional or offensive to public policy;
2. but however the sanction of the court should be sort before enforcing these right (which begs the questions as whether it is in fact parate execution any more).

What this means is that in the event of you as a creditor having taken security such as cession of book-debts, cession of insurance policies, pledges, notarial bonds and any other form of security. Then you are required to first seek the courts sanction before you can enforce your rights in terms of the security. In addition the court will ensure that it does not deem the security to be contrary to public policy before allowing you to take action on the security.

Hints at Credit Rate Hike

2006-03-30T17:27:00.000+02:00

Fin24.co.za reports that Reserve Bank govenor Tito Mboweni strongly hinted on Wednesday that interest rates were likely to go up rather than down, saying the bias in monetary policy was on the tightening side. He did not suggest that a hike was imminent.

The article went on to state:

“The Reserve Bank cut the repo rate by 6.5 percentage points to 7% between 2003 and 2005 - driving prime lending rates to a 25-year low of 10.5% - and fanning strong domestic consumption, which is driving economic growth.

Data from the bank released on Thursday showed that private sector credit extension (PSCE) increased by an annual rate of 21.54% from an upwardly revised 20.61% in January, and above forecasts for a 20.55% rise.

“This is going to cement the case to hike interest rates. The numbers do nothing to alter the stance now developing in the market that the next move in interest rates will be up,” said Colen Garrow, economist at Brait.

“The consumption side of the economy needs to be slowed.”

There was strong growth in asset-based credit during February, with mortgage advances jumping by an annual rate of 29.5% from 27.4% in January.

Mortgage advances accounted for R12.8bn of the R16.7bn monthly increase in asset-backed credit in February.

Strong credit-based spending

On Wednesday, central bank senior deputy research head Brian Kahn said high levels of domestic debt were sustainable in the short term because of low interest rates.

The cost of servicing the debt was around 7% of disposable income compared with 15% in 1998. In its March quarterly bulletin the central bank said household debt as a percentage of disposable income jumped to a record 65.5% in the fourth quarter of 2005.

But Mboweni said that households may struggle to manage the debt if interest rates rise, a warning he has made in the past.

“The bottom line is that credit-based spending remains incredibly strong. Debt levels continue to rise and if there is any upward adjustment to interest rates, that would have major impact on debt serving costs,” said Adenaan Hardien, economist at African Harvest Fund Managers.

The data also showed that during February the broadly defined M3 measure of money supply grew by an annual 21.05% after increasing by 19.72% in January, exceeding forecasts for 18.75%.

Money supply growth was pushed up by a run down in government deposits because of scheduled redemption and interest payments on bonds. It was also inflated by the increase PSCE and net foreign assets.

But government bonds held some of their early gains, with the yield on the government R153 bond due 2015 down 1.5 basis points at 7.48%.

“It (market’s reaction) illustrates Mboweni’s nonchalant attitude towards local monetary data,” said Michael Keenan an analyst at Econometrix Treasury Management.

Mboweni said on Wednesday that preliminary research had shown that the relationship between M3 money supply growth and inflation was statistically insignificant and that central banks were moving away from monetary aggregates to directly targeting inflation.”

Great Managers

2006-03-28T10:31:00.000+02:00

“What Great managers do” by Marcus Buckingham, in an article in the March 2005 Harvard Business Review, based on his book, “The One Thing You Need to Know”. He starts with a great analogy:

“Average managers play checkers, while great managers play chess.”

The difference?

In checkers all the pieces are uniform and move in the same way; they are interchangeable. You need to plan and co-ordinate their movements, certainly, but they all move at the same pace on parallel paths. In chess, each type of piece moves in a different way and you can’t play if you don’t know how each piece moves. More importantly you won’t win if you don’t think carefully about how you move each piece.

Great managers know and value the unique abilities and even eccentricities of their employees, and they learn how best to integrate them into a coordinated plan of attack.

In order to make the most of each employees differences and manage them optimally:

· What are their strengths
· What are the triggers that activate those strengths
· What is their learning style

What are their strengths

It takes time and effort to get to know an employee’s strengths and weaknesses. The great manager spends a great deal of time outside the office walking around, watching each person’s reactions to events, listening, and taking mental notes about what each individual is drawn to and what each person struggles with.

To identify a person’s strengths, first ask, “What was the best day at work you have had in the past three months?”

Remember a strength is not merely something you are good at. In fact it might be something you aren’t good at yet. This question will prompt your employee to start thinking about his interests and abilities from this perspective.
Conversely to identify a person’s weaknesses just invert the question “what was the worst day at work you had in the past three months?” and then probe for details about what they were doing and why it grated them so much. As with a strength, a weakness is not merely something you are bad at it is something that drains you of energy. An activity you never look forward to doing and when you are doing it all you can think about is stopping.

Although you are keeping an eye out for both the strengths and weaknesses of your employees, your focus should be on their strengths. Research by Albert Bandura has shown that self assurance not self awareness is the strongest predictor of a person’s ability to set high goals, to persist in the face of obstacles, to bounce back when reversals occur and ultimately succeed.

Great managers know it is their job not to arm each employee with a dispassionately accurate understanding of the limits of their strengths and the liabilities of their weaknesses but to reinforce their self assurance. That is why they focus on strengths.

When a person succeeds the great manager does not praise their hard work. They tell their employee that they succeeded because they have become so good at deploying their specific strengths.

On the hand when an employee fails, assuming their failure was not attributable to factors beyond their control, always explain failure as a lack of effort, even if this is only partially accurate. This will obscure self-doubt and give them something to work on as they face up to the next challenge.

Repeated failure, of course, may indicate weaknesses where a task requires strength. If the problem amounts to a lack of skill or knowledge that is simple to solve simply offer the relevant training. If this does not remedy the situation then you are dealing with a lack of talent and you have to find a way to manage around this weakness.

A second strategy for overcoming an employee weakness is to partner them with someone who has a strength in the area where the employee is weak so that they can complement each other.

Peter Drucker the father of modern mangement expressed a similar sentiment when he said:
“Effective organizations put people in jobs in which they can do the most good. They place people — and allow people to place themselves — according to their strengths.”

Trigger good performance

A person’s strengths are not always on display. Sometimes they require precise triggering to turn them on. Squeeze the right trigger and a person will push them selves harder and persevere in the face of resistance. Squeeze the wrong one and the person may well shut down.
The most powerful trigger by far is recognition, and not money.
Great managers take this one step further and realize that each employee plays to a slightly different audience. To excel as a manager you must be able to match the employee to the audience he values most.
One employee’s audience may be his peers, another employee their manager, still another recognition in the form of professional or technical awards. Some even value feedback from customers as the best form of recognition.

Tailor to learning styles

There are three main learning styles:
1. analyzing
2. doing
3. watching

An analyzer needs to absorb all that there is to know about a subject before they can feel comfortable with it. The best way to teach an analyzer is to give them ample time in the classroom. Role play with them. Do post mortem exercises with them. Always allow them time to prepare.

The doer’s most powerful moments of learning occur during the performance of tasks. Trial and error are integral to their learning process. So rather than role play with a doer give them a specific task within their role that is simple but real and give them the expected outcome and get out of their way. Then gradually increase the degree of each task’s complexity until they have mastered every aspect of their role.

Watchers wont learn much from either role playing or doing. They can learn a great deal when they are given a chance to see the total performance. If you are trying to teach a watcher, by far the most effective technique is to get them out of the classroom and away from the manuals and let them ride shot gun with one of your most experienced performers.

Great managers don’t try to change a person’s style. They never try to push a knight to move in the same way as a bishop. Always remember that great managing is about release, not transformation. Its about constantly tweaking your environment so that the unique contribution, the unique needs and the unique style of each employee can be given free reign.

How They Work

2006-03-22T08:51:00.000+02:00

The 20th March 2006 issue of Fortune Magazine has a very interesting cover story entitled “How I work” in which various world-class business leaders were interviewed and give insight into their practical methods of achieving effectiveness in their work.

An interesting observation by a University of California study of businesspeople, was that they were interrupted once every 11 minutes and it takes them 25 minutes to return to their task. “Busyness is the great affliction of modern business.” To quote one of the interviewees, Nandan Nilekani, the CEO of Infosys, “My slogan is, Be less busy and more effective.” Flowing from this is obviously the need to focus on work while still being aware and communicating with others around us. The article states, “How to solve this challenge depends on where your job falls on the spectrum of work. On the one extreme, there is the lone monk copying a manuscript. His job requires no communication- so interaction is a distraction. A taxi dispatcher’s job on the other hand, is nothing but communication. Talking is doing. So a vow of silence would bring performance to zero. Chances are that your job falls somewhere in between, and its up to find your best way.”

Other gems of wisdom from these effective world business leaders includes comments from A.G. Lafley, the Chairman, President and CEO of Procter & Gamble who has implemented the company’s management effectiveness programme called Corporate Athlete in his own life. This includes:

· Working really hard for an hour to an hour and a half then taking a five to fifteen minute break
· Eating five to six times a day to manage your glycemic level
· Teaching yourself to mediate
· Making sure you take time off work completely to recharge yourself

Amy Schulman, an attorney and partner at DLA Piper Rudnick Gray Cary says, “Many successful woman have become successful because they’re awfully good at being compulsive and organised and doers. But at some point that becomes paralyzing. I think men have traditionally been much better at not micromanaging. It’s hard to be successful and be a control freak, because if you cling to things, you’re going to bottleneck. Delegating to other people – appropriately delegating - is very liberating.

Mr Price Grants Credit

2006-03-20T10:45:00.000+02:00

The Business Report confirms the entry of the formerly exclusively cash retailer Mr Price into the credit market.

Joint chairman Stewart Cohen says the move at the fast-growing retailer is more about offering a credit option to customers, and argues that the long-term future of in-store credit will increasingly be threatened by bank credit cards.

Credit retailers such as clothing group Edgars Consolidated Stores (Edcon) and furniture seller JD Group make a significant proportion of their sales on credit. At JD Group, half of sales are made on credit.

Credit retailers also profit from interest charges, but Cohen makes it clear that it is not Mr Price’s goal to adopt a credit retail business plan.

Rather, he says, credit is being introduced because it suits some customers who do not have bank credit cards, particularly those who are reluctant to carry cash.

Historically, most South Africans have not had access to bank credit cards.

In recent years, former cash retailers Jet, owned by Edcon, as well as Woolworths, introduced store cards into their business.

Jet’s target market has traditionally been the black mass market. Mr Price has recently opened stores that are more accessible to a growing market of black customers.

But Cohen says he does not believe there is a huge long-term future for store cards, arguing that, as in the US, bank credit cards will increasingly steal market share from retailers.

He says this will be compounded by the increasing availability of credit cards to all South African consumers.

Late last year Mr Price Home started selling big ticket items such as furniture, which only the most upscale customers can pay cash for.

Cohen says such purchases should benefit from the credit option, but does not believe smaller furniture purchases will be significantly affected.

He argues that the forecasted low interest rate future has also not motivated Mr Price to offer credit - “though it is comforting”.

Mr Price Group already offers credit at Miladys and is rolling it out to its Mr Price clothing stores, at Mr Price Home and its linen business, Sheet Street.

Cohen says the fact that the group already has a credit system means that it will be relatively inexpensive to extend it to the entire group.

Credit Growth a Concern

2006-03-16T13:36:00.000+02:00

An article appearing in the Sunday Times reports credit growth in January 2006.

Economists said the figures would be of concern to the Reserve Bank, and further support keeping interest rates unchanged at its meeting next month, as oil prices have also risen in recent weeks.

Figures released by the Bank show that private sector credit extension rose by R16,7bn during the month, bringing year- on-year growth to 20,4% (19,6%).

Underlying credit demand, which excludes investments and bills discounted, was up 1,7% month on month, and 20,9% on an annual basis.

The broadest measure of money supply, M3, increased by R4,5bn in the month, and was up 19,7% year on year, slowing slightly from December’s 19,9%.

“The strength of domestic demand should continue to be an important driver of monetary policy this year, warranting a degree of caution by the monetary policy committee,” JPMorgan economist Marisa Fassler said.

However, she said, with the strong rand and underlying inflationary pressure subdued, there is little pressure for interest rates to rise any time soon.

Instalment sales credit rose by R797m but growth in this category eased from 20,4% year on year in December to 19,1%.

The leasing finance category increased by R462m and 19,3% (18,8%).

Demand for mortgage finance remained strong, with mortgage advances increasing by R7bn to 27,4% year on year.

National Credit Bill Regulations Released

2006-03-02T11:18:00.000+02:00

The regulations that set out the nuts and bolts operation of the National Credit Bill have been released by the Department of Trade and Industry on the 20th February 2006 and can be downloaded.

After public comments have been received, President Mbeki is expected to sign the National Credit Bill into law.

In the next six weeks the public is urged to make their views known to the DTI, and it's anticipated that final regulations will be published in April.

Commenting on the regulations and bill on the Government news website Deputy Director-General for Consumer and Corporate Regulation, Astrid Ludin said she believed that consultation was important as the regulations would have a significant effect on the industry.

"Community stakeholders will also wish to engage with us on the proposals. For this reason, we have provided adequate time for review and consultation," she said.

She said that important aspects of the regulations included a cap on interest and fees on micro loans that up to now were exempt from the Usury Act, bringing into the regulatory net such lending operations as pawn shops, and limits on initiation and other lender fees.

"We hope that through these regulations we will be able to address some of the abuses in the market.

"While the ceilings have been set at rates at which reasonable lenders will be able to operate and at which formal lenders will be able to make mainstream credit products available to the low income market, we are aware that we will be making it difficult for some of the peripheral lenders to operate.

"I believe that no one will, however, dispute the social need and the public interest of doing so," she said.

Ms Ludin added that the regulations would amongst other things regulate the retention periods for information on credit bureaux.

"At present, credit providers list consumers as slow payers, or bad payers, for example, with credit bureaux on a fairly arbitrary basis," she said.

She explained that such information was kept for three years, but consumers had no way of redeeming themselves during that period.

The new regulations propose that information should be maintained for one year only. The regulations also propose that information on borrowers' payment profile, listing both positive and negative information, be kept for five years, rather than the current three years as it will give a better and more complete picture of a consumer's actual credit history.

Since 1992, the regulations brought into effect interest rate ceilings across the board on all credit transactions, particularly in the low- income market.

However there are two concerns for the dti about the proposed maximum interest rates and fees.

"The first is that there is always the danger that the market does not treat these rates as the maximum and that all credit providers suddenly start increasing their fees.

"The second is that existing products, especially of mainstream credit providers, are repriced, so that consumers are now faced with higher prices for the same products. We'll be monitoring prices in the market very closely.

It is within our powers to adjust the maximum rates permissible quickly, if the need arises," she said.

According to Ms Ludin, strictly applied and monitored standardized disclosure of credit terms would allow consumers to compare.

"The credit bill is a significant intervention in the market and will require a change in practices," Ms Ludin says.

"Financial institutions have been working through the compliance requirements, and there has been close consultation both with the dti and the Micro Finance Regulatory Council and the major associations about how compliance obligations can be affected," she said

Debt Collectors Use of Fake Summons to be Outlawed

2006-02-20T11:03:00.000+02:00

The Business Report reports that the Department of Trade and Industry will soon outlaw the use of fake summons, warrants of execution and other legal documents by debt collectors and creditors. This follows on recommendations by the by the department of trade and industry's consumer affairs committee.

This practice used by some unscrupulous debt collectors, confuses debtors into to thinking that legal proceedings have been instituted against them when they have not. Tanya Woker, the chairman of the consumer affairs committee, said, “…it was an unfair business practice for any entity to issue a letter of demand that simulated a summons or a draft summons or used the word "summons" or "draft summons" in the title or subtitles of the letter.”

However, Woker said it was not an unfair business practice to state in the text of the letter of demand that a summons would be issued unless the outstanding amount was paid.

Therefore all creditors are called upon to ensure that they and the debt collectors they use do not use this illegal practice. Rather use a firm of debtor collectors that does have the ability to immediate hand-over to a firm of attorneys for real legal action.

Creditors Restructuring or Buying Businesses Beware

2006-02-14T15:49:00.000+02:00

The case of SA Breweries Ltd vs van Zyl 2006 (1) SA 197 (SCA) is of interest to those creditors who are companies that have bought businesses including book debt and debtors or restructured their businesses by selling the business of one of their trading entity to another of theirs.

SAB had, as part of a restructuring, sold the business of South African Breweries Ltd, a company formed in 1969 (“SAB 69”) to Lexshell 159 Investments (Pty) Ltd, which later converted to South African Breweries Ltd (“SAB 98”). Part of the sale agreement was the cession of SAB 69’s “right title and interest in and to the debtors” to SAB 98.

In this case a credit agreement had been concluded with Gensam (Pty) Ltd with van Zyl and a number of others signing as sureties to SAB 69. After the sale of SAB 69’s business to SAB 98, they continued to supply Gensam with products and ultimately Gensam defaulted on payment and was sued together with all the SAB 69 sureties by SAB 98. Van Zyl successfully raised the defence that he was not liable to SAB 98 in terms of the SAB 69 suretyship. The Supreme Court of Appeal reasoned that the deed of sale, by virtue of the SAB 69’s ceding its “right title and interest in and to the debtors” to SAB 98 only gave SAB 98 the right to sue the sureties for debts incurred up to the date of the sale incorporating the cession and not beyond that date as SAB 69 could not ceded rights that had not accrued to it.

This case is therefore a warning to those companies in a similar position to SAB to ensure that before they trade any further with the debtors of the old entity or the debtors of any business they have purchased that they have in place the necessary suretyship or other security directly with themselves or their new trading entity.

CREDIT MANAGEMENT SEMINAR - Durban

2006-02-01T12:55:00.000+02:00

Bentley Credit Control takes pleasure in inviting all involved in the credit management of commercial collections (business to business) to a full day seminar covering the following topics:

1. STANDARD TERMS OF TRADE AND INCORPORATING THEM IN YOUR TRANSACTIONS

A general look at ensuring your STC apply to all your transactions and with special emphasis on suretyship clauses in light of the Humphreys vs Jewells case

2. FORMS OF SECURITY

A look at the different ways of securing your debt with special emphasis on cessions of book debt and realising a debtor’s property without court sanction and the Supreme Court of Appeals judgments in this regard.

3. CREDIT INSURANCE

Get an independent overview of what insuring your debtors is all about in South Africa and the cost effectiveness of this option.

4. MANAGEMENT: THE ART OF GETTING THINGS DONE

We will look at what it takes to get things done yourself and with your staff. The ability to motivate and execute goals and plans successfully to achieve positive personal and business success.

PRESENTERS:

Brett Bentley:
An attorney with 12 years experience specialising in debt recovery, credit management and commercial litigation. Also the CEO of Bentley Credit Control a specialist debt recovery and credit management firm and former national director of the Institute of Credit Management.

Kirsten Morley:
The coastal sales manager of Niche International Insurance Brokers, South Africa’s only truly independent insurance brokers specialising solely in credit insurance.

DATE: 27th March 2004

TIME: Registration begins at 8am for an 8.30am start and the workshop will finish at approximately 4 pm

AGENDA:

1. Welcome
2. Standard Terms Of Trade And Incorporating Them In Your Transactions
3. Tea Break
4. Forms Of Security
5. Lunch
6. Credit Insurance
7. Tea Break
8. Management: The Art of Getting Things Done

VENUE: The Durban Country Club, 101 Walter Gilbert Road, Durban

COST: R 1200.00 per person ( for companies with 3 or more attendees a reduced fee of R 950 per attendee will be charged)

WHO SHOULD
ATTEND: Financial managers, Credit managers and credit controllers

THE NUMBER ATTENDING IS LIMITED AND PAYMENT IS REQUIRED TO SECURE BOOKING.

Register Today

Telephone : (031) 3033240
or
Fax: (031) 3039311
or
email: bentley@law.co.za

Sales Rep Position Available

2006-01-18T10:09:00.000+02:00

Bentley Credit Control are expanding and looking for the services of a driven and experienced sales person for client recruitment for debt recovery.

The position will be Durban based and applicants must have their own transport. Having a tertiary sales and marketing education would be an advantage. The remuneration package includes a basic and commission. C.V.'s can be emailed to bentley@law.co.za

Best Wishes for 2006

2006-01-05T09:49:00.000+02:00

We would like to wish all the readers of this website a prosperous and successful 2006.

There will be challenges in the form of the National Credit Act which has been passed and should be enacted early this year, already it seem unlikely to be in its entirety immediately and we still need to see the draft accompanying regulations. But on the positive side the country’s economic fundamentals still seem to be good and we can look forward to another year of economic growth and development.

To all those involved in any way in the credit management industry all the very best for the new year and we at Bentley Attorneys and Bentley Credit Control aim to provide better service and industry information to you in the year ahead.

If you have any news that you believe would benefit the industry as a whole please pass it along to us so we can share it. In addition if you feel we could improve and/or increase our service in any way please let us know.

Debt Collection: Emoluments Attachment Orders

2005-11-08T14:34:00.000+02:00

In the case of Russells (Ceres) v Manyashe en 'n Ander 2005 (4) SA 380 (C) the court looking at the issue of emoulments attached orders ("EAO") granted by consent, in terms Section 65J of the Magistrates' Court Act 32 of 1944, where the debtor had consented to the EAO before the granting of judgment held that these were valid.

Therefore the usual practice of getting the debtor to sign a Section 58 Consent to judgment consent to judgment incorporating a consent to an emoluments attachment was accepted by the court as legal.

Please note that there is a practice by certain creditors to get the debtor to sign a consent to judgment and EAO before the debt is due and payable and this, it is submitted, is not legally allowed and enforcable.

The Line Between Assertive and Over-Aggressive Credit Control

2005-10-28T13:22:00.000+02:00

I have in all my advising and seminars advocated a proactive credit control policy for creditors. In other words - based on the principle of the “squeaky wheel gets the oil” - the creditor maintains a defined, concerted and certain credit control procedure with their debtors and thereby ensures that they get timous payment of their account. My chant being “Make yourself a priority creditor in your debtor’s life!”

But is there the possibility that creditors can over-step the mark and alienate good clients? I believe that is the case and creditors have to guard against this as they could loss good clients through over zealous credit management. I will use 2 examples of this in my own life.

The first is Maxprop Durban, the managing agents of a body corporate in which I own a sectional title unit. Their function, amongst others, is the collection of monthly levies which are payable on the 1st day of the month. Now being like a doctor who does not always look after his own health or an attorney who does not draft his own will sometimes I let the payment of the levies slip a week or two. The sms text messages I received from them reminding me to pay were great. But when this was dropped and they went to sending me the “standard” letter of demand threatening blacklisting and the usual debt collection plagues when the debt was less then 30 days overdue it annoyed me no end. In fact once I did not pay for almost 2 months just see if they were foolish enough to try list an attorney with a credit bureau and to give myself an excuse to act against them. They did not take the further step and merely added interest. The bottom line is inappropriate credit control procedures were used too early in the day and they have alienated me.

The second example was one of the Netcare hospitals, St Augustine’s in Durban. My mother went in for a day operation at the end of August and I took responsibility for the accounts. Payment of the doctor and the pathologist were not a problem but quite frankly the credit control procedure of St. Augustine’s was offensively assertive. I had paid a largish deposit to the hospital and there was a balance of R 300 odd outstanding. Toward the end of August an account was sent out and this was followed shortly by a telephone call to my mother. I was in the middle of a mad rush at work as I was going overseas for the first 3 weeks of September. I told my mother to tell them I would sort it when I got back at the end of September. On my return my poor mother had continued to be harassed by the hospital’s credit department and I duly posted off a cheque within a couple of days of being back in the country as promised. As fate would have it the cheque did not arrived ( yes! yes! I know all of us in the credit control industry have heard the “cheques is in the post” story but this time it was true). I had my bookkeeper telephone the hospital in mid October to query whether they had received payment when I saw the cheque had not gone through my bank. I then thought I would give it an extra week for the cheque to arrive in order to try avoid the unnecessary cost of putting a stop payment with the bank which costs me R 85 on a debt which was just over R 300. Lo and behold my long suffering mother received a letter of demand from the hospital’s debt collection agency with the debt less then 60 days old. I duly paid the account by personally going to the hospital but I swear I will avoid giving the hospital any more of my business in the future.

Yes an assertive defined credit control procedure is vital to a successful credit management policy but do not allow your credit control to alienate good future business by being over-aggressive in its implementation.

Brink Judgment on Suretyships in Credit Applications Criticised

2005-10-05T08:26:00.000+02:00

Previous I had commented in generally terms on the Brink v Humphries & Jewell (Pty) Ltd 2005 (2) SA 419 (SCA) judgment and advised that I would be submitting an article for publication in a legal journal setting out the legal reasoning of why I believe majority decision of the Supreme Court of Appeal in this case was wrong.

The Article entitled “Signing Twice on the dotted line” was published in the October 2005 issue of the South African Attorneys’ Journal De Rebus at page 52.

Personal Liability of Members of Close Corporation

2005-08-24T09:21:00.000+01:00

One of my bugbears over the years has been the ineffectiveness of the personal liability of members of deregistered close corporations provisions of the Close Corporation Act (Section 26). Such much so that I have written numerous articles/letters about in various publications including the official attorneys magazine, De Rebus.

The gist of my rants were that while when one is faced with a situation where you are the creditor of a close corporation which has ceased trading with no real assets one can apply for the deregistration of the close corporation which renders the members personally liable for the debts of the corporation, that the process is unduly delayed by the Registrar of Close Corporations in its instances of first referring the matter to various government departments, including SARS, before deregistering the close corporation. In some case it was taking up to six years to effect deregistration and effectively rendering the personal liability provisions useless.

However I must say that eventually the Registrar of Close Corporations has got its act together, in that while it still appears to be first referring the deregistration to the various government departments, they have speeded up the entire process. In my last deregistration application, we managed to effect the entire deregistration within two months, which is an incredible improvement on previous applications. It would appear that the other government departments have speeded up their side of things and now creditors can use this as an effective tool against debtors.

Forms of Securing Debt from a Business Debtor

2005-08-15T10:04:00.000+01:00

The concept of separate legal personality for certain forms of business is a practice which we inherited from English law and it has important consequences when extending credit to a “business debtor”. When dealing with private companies, close corporations and even to a degree trading trusts you have to be aware that the shareholders/directors, members or trustees are not personally liable for the debts incurred by the business. In addition to this factor is the fact that the credit extended to business debtor can sometimes be very large.

Therefore creditors extending credit to business must look for various forms of security from their debtors. Some of the forms of security are listed below together with their a brief description and some of their pros and cons.

Suretyship

Is a contract whereby a person – the surety – obliges himself on behalf of a debtor to a creditor, for the payment of the whole, or part of what is due from such debtor. The advantage of a suretyship is that if the debtor does not pay, there is a second source to claim from. On the other hand it does not make a bad risk a good risk and when has to look at exactly who is signing surety and their credit worthiness.

Cession of Book debts

Here a debtor cedes his the right to collect on their outstanding debtors to a creditor as security for his debt with the creditor. The advantage of this being that it is usually the single largest liquid asset of a business but the disadvantage is that the collectablity of these debts is unknown and unreliable.

Pledge

A contract whereby a debtor places property in the hands of his creditor to secure their debt. An advantage, and potential disadvantage, is that you have the property in your possession to sell on default and another disadvantage is that the asset must be returned in the same condition as it was given.

Post-dated cheques

A cheque draw for presentation at a future date, which is not strictly a form or security but is a way to ensure that a future payment can at least be presented for payment although it maybe be dishonoured.

Lien

This is a legal right of retention over property held by a creditor until the creditor’s claim in respect of that property in the creditor’s possession has been paid. You have leverage over the debtor in that they can not get return of their property until they have paid or secured your debt. The property must be returned when the account is paid in exactly the same condition as it was given and if the property is lawfully removed from your possession you loss your right to the lien.

Notarial Bond

Obtained by registering a general Notarial bond over the movable property of a debtor, such as stock or furniture. The security is in writing and registered with the deeds office but this security only becomes effective on the perfecting of the bond by a court application.

A more effective notarial bond is the Security by Means of Movable Property Act, 57 of 1993 allows for a notarial bond to be registered in respect of specified corporeal, moveable property. This form of notarial bond is effective on the insolvency of the debtor, which a general notarial bond does not unless perfected before insolvency.

Both process are relatively involved and timely as they involve a notary and registrar’s office.

Mortgage Bond

A registered bond over immovable property of a debtor is a very effective security depending on the value of the property, the number of other bonds but it is a lengthy and involved process to register and in addition can be costly relative to the size of the debt and is only suitable for relatively debts.

Political Pressure on Credit Bureaus Continues

2005-07-27T10:16:00.000+01:00

The credit bureaus continue to receive political pressure as reported in the Business Day article entitled “ Minister flays ‘mafia’ credit bureaus “ in which it was reported that:

HOUSING Minister Lindiwe Sisulu yesterday added her voice to growing calls for amnesty for people blacklisted by credit bureaus, saying credit bureaus “operate as a mafia”.
Government’s criticism will put renewed pressure on credit bureaus, which are already facing a drastic revamp of their business practices under the impending National Credit Bill.
Sisulu was speaking at the Financial Sector Campaign Coalition conference in Johannesburg, which heard South African Communist Party leader Blade Nzimande call for a once-off amnesty for everyone blacklisted by credit bureaus.
Nzimande said on Monday that “if we are moving to a new credit regime, let’s give people one chance to restart their economic lives”.
In response, Sisulu was scathing yesterday, saying she was “vehemently in support” of Nzimande, and that these bureaus had become “the bane of the poor”.
“This is a serious stumbling block that renders three-quarters of the working class ineligible for finance,” she said.
The bureaus keep information on 18-million South Africans, which is then supplied to banks and retailers. But the way in which these bureaus operate has been partly blamed for a situation where 67% of the population gets less than 6% of credit granted, while 18-million consumers are forced to take out expensive microloans on which they pay as much as 360% in interest.
Sisulu said that despite “radical suggestions”, the banking sector needed some sort of system to assess creditworthiness.
“We are equally passionate, but we must find a way responsibly to do what must be done … What would you put in its place?”
She said there were new regulations in place affecting bureaus that could lead to greater transparency in the way they operate.
Sisulu’s comments accord with those of Finance Minister Trevor Manuel, who said on Monday that even though the issue of the bureaus was important, any solution should not compromise the stability of the country’s banking system.
As it stands, these bodies are not obliged to inform someone when consumers are listed nor are they obliged to check the accuracy of their information.
Also, consumers cannot get access to their own credit records unless they pay to do so.
But the new National Credit Bill, which could be law before year-end, will force credit bureaus to change they way they operate.
The new law will oblige bureaus to provide information free of charge and will be held to account for the accuracy of information.
The bureaus have said this would add massive costs to their business and create an administrative nightmare by having to provide free credit reports to millions of South Africans.
Speaking last night, Credit Bureau Association executive director Ashina Singh said the complaints about the bureaus were a case of people “shooting the messenger”.
“Bureaus only report the factual information they receive from credit providers, and play no part in the decision-making process of whether or not to grant credit,” Singh said. Additional reporting by Stephen Gunnion.

New Bentley Attorneys Website

2005-07-11T11:17:00.000+01:00

Bentley Attorneys have launched a new website which can be viewed at bentleylaw.co.za.

National Credit Bill: Repossesion and Debt Counselling

2005-06-21T14:01:00.000+01:00

I have had a chance to have a look at some aspects of the latest version of the National Credit Bill (to which the increasingly meaningless title “final” has also been attached).

There are two aspects that I would like to discuss:

1. The deletion of the repossession provisions of the bill; and
2. The debt counselling provisions.

The previous versions of the Bill had a Section 131 which made provision for the compulsory repossession and sale of goods sold in terms of a credit agreement in a similar manner to the present Credit Agreements Act. The latest version of the Bill, however, appears to do away with the compulsory repossession of goods sold in terms of a credit agreement. If this compulsory repossession provision is included in the Act, it is to be welcomed by Creditors, as it will do away with the sometimes timely delays in the repossession process before a creditor can proceed against a debtor for the outstanding balance, while at the same time still allowing creditors who sell “big ticket” items, such as motor vehicles, the option to proceed with the repossession of the valuable goods.

The problem for creditors comes with the provisions of Section 129 which, although well-intentioned, are ill defined and have the potential to unduly delay the creditor in proceeding in the collection of outstanding debts. Section 129 makes provision for giving the debtor the option to have the matter referred to a debt counsellor, alternative dispute resolution, a consumer court or the ombudsman before legal action can be instituted against a debtor in terms of a credit agreement.

The theory of providing the debtor the option of referral to these options (although I believe the choice should not include alternative dispute resolution) is sound. The lack of financial literacy amongst South Africans is an issue that needs to be addressed, and offering those getting themselves into financial difficulties the option to rehabilitate would be a step in the right direction.

As an aside, what is particularly alarming to me as an attorney acting in a number of consumer collection matters, is the disproportionately large number of teachers, mostly from previously disadvantaged communities, in financial difficulties, and who are showing very poor financial literacy. These are the people who are educating our future consumers, and if they have no idea how to handle their own personal finances then the chances are that, as teachers and role models to their pupils, they are instilling these bad financial patterns on our future generations.

But I digress: the practical problem with the current form of the Bill is that the referral to debt counselling and the other alternatives is grey in its procedural time frame. While if the debtor does not elect to use these options within a prescribed period the creditor can institute legal action, once the debtor has elected to use these options there is no time frame for these external bodies to deal with the matters. Exactly who and how a number of these bodies are selected/constituted is also not clearly defined. But if any of our experiences with state and parastatal organisations is anything to go by, then speed of delivery of service will not be one of their strong points.

The Bill needs to provide for time frames for these organisations to deal with these matters, or the successful commercial operation of South African creditors could greatly be compromised.

I trust that those representing the credit community and making the final representations to the Parliamentary Portfolio Committee on Trade and Industry will address this issue, and that changes will be made before the Bill is enacted.

Credit Demand at a High - Pressure on Interest Rates

2005-06-01T07:32:00.000+01:00

Business Day reports that "DEMAND for credit surged to a 17-month high in April — enough to kill hopes of another interest rate hike when the Reserve Bank’s monetary policy committee meets next week, writes Ayanda Shezi.

The environment of low interest rates and low inflation has boosted consumer spending to record levels, affording consumers the opportunity to finance their purchases of motor vehicles, houses and electronic goods through credit.

With the pressure of a weaker rand and inflation trending higher, the Bank was unlikely to cut rates further, economists said yesterday.

Figures released by the Bank yesterday showed that private sector credit extension and money supply grew above market expectations, with the rate cut in April expected to support these figures in the coming months."

Credit Law: Beware when Incorporating Suretyships into Credit Applications

2005-05-27T09:25:00.000+01:00

In the recent Supreme Court of Appeal case of Brink v Humphries & Jewell (Pty) Ltd 2005 (2) SA 419 (SCA) the defence raised by the surety was one of mistake - iustus error- in that he argued that he was unaware that the credit application which he signed incorporated a suretyship. This defence was successfully upheld by the court.

The facts of the case were briefly that Brink being a director of Guzto Log Homes (Pty) Ltd had signed a credit application form of Humphries & Jewell (Pty) Ltd which had been completed by his project manager. He disputed having read the application form, a copy of which is reproduced below (“the document”). Furthermore he contended that he is did not know that the credit application incorporated a suretyship clause.

The majority court decision held that:
· Brink had acted under a misapprehension that the document was solely a credit application.
· Humphries and Jewel had misrepresented the document as solely a credit application and that the misrepresentation resulted in Brink making a fundamental mistake.
· That a reasonable businessman would not assume that a credit application would incorporate a deed of suretyship

From these conclusions the court held the suretyship was void ab initio.

I believe the court's judgment was incorrect and I will be publishing a paper shortly in a legal publication on the legal reasoning of why I believe the court erred but for the credit management community the important aspect of this judgment is its effect.

The judgment sets out what it sees as the necessary requirement of a credit application incorporating a suretyship and it is imperiative that cerditor's lawyers and credit managers ensure that their credit applications incorporating suretyships comply with these requirements.
The majority judgment held that they saw the following as necessary to draw the signatory’s attention to the fact that the credit application incorporated a suretyship:

· A prominent heading which proclaims that it is a credit application form and personal suretyship.
· That the signatory is required to sign the form twice, once in each capacity as a representative of the debtor and as surety, alternatively a signature can be a ‘double signature’ but a clear indication that the signatory is signing in two capacities, or, even better, a provision for two signatures with appropriate wording indicating that one is as surety, should eliminate the difficulties which do arise in a case such as the present.
· In any place in the form which identifies the capacity in which the signatory is signing should identify both capacities.

For example in the Brink case the form reads: (‘I, THE UNDERSIGNED ……. IN MY CAPACITY AS ……….. OF THE DEBTOR’); and the place for signature which follows those clauses has the qualification ‘FOR THE DEBTOR’. This should have read ‘FOR THE DEBTOR AND IN MY CAPACITY AS SURETY’. Cloete attached considerable importance to this latter aspect. Stating the attention of the signatory would inevitably be drawn to these parts of the form as they had blanks requiring completion.

· That the clause containing the suretyship should be made conspicuous from the rest of the agreement, Cloete suggesting red ink

National Credit Bill Before Parliamentary Portfolio Committee

2005-05-26T07:43:00.000+01:00

The much discussed National Credit Bill has come before the Parliamentary Portfolio Committee on Trade and Industry. A report on this appears in in Personal Finance.

In addition the latest version of the bill that is available on the web appears to be that on the Parliamentary Monitoring Group website which is interestingly qualified with the words final version awaited.

We will keep you posted on developments with the bill and hopefully get some certainty on the final version before we take a general look at the bill again.

Time Management

2005-05-09T11:02:00.000+01:00

"Time is what we want most, but what we use worst."
William Penn

There are volumes of books that have been written on ?time management? for business executives. Today more and more time is at a premium in our workday. Yet, as with most things in life, effective use of it comes back to self-management and how we manage ourselves and what happens around us.

Stephen Covey in his seminal work " 7 Habits of Highly Effective People" explains in the chapter called "Put First Things First", that we can divide our time into 4 quadrants along axis of urgency and importance. Below is a graph which depicts Covey's matrix.

Covey points out that many of us get trapped in quadrants I and III - crisis management. When we get burnt out in the frantic pace of these quadrants we find ourselves escaping to the guilt ridden "sanctuary" of quadrant IV. Covey points out that the most productive and profitable quadrant is II and probably it is the most neglected.

Covey refers to the successful time manager as being in the "fourth generation of management" - one who has evolved from creating checklists and notes (first generation), to scheduling and calendaring (second generation), to prioritization that focuses on important work (third generation), to the realization that the term "time management" is a misnomer - the issue is not to manage time, but to "manage ourselves."

Yet for all the sound theory of Covey a lot can be said for the practical advice of Kerry Gleesen in this book "The Personal Efficiency Program" - previously review on this blog. Gleesen's simple yet procrastination defeating advice of "Do it Now?" seems to run against the grain of the priorization model of time management. But it has more to do with having the right mind set to tackling work, particularly those tasks you keep putting off. You know them - the files that sit in a corner of your office growing a dust castle on top of them and sucking energy out of you by always niggling away at the back of your mind.

You need to free up your time so that you can focus of the important quadrant II activities. So what are some practical steps that you can take in effective time management? Here are a couple of ideas:

1. Effective Use of your Assistant

Bert Webb in his blog Open Loop has a good post entitled "Your Assistant: Keyholder of your Time" in which he points out how you can effectively use your assistant to protect your time from unwanted calls. Make a list with your assistant as to:
· who always can get through to you (e.g. your boss and important clients)
· who should never get through to you (e.g. unsolicited sales people)
· the "inbetweeners" who can connect you depending on your schedule

2. Delegation

In addition your assistant can be a very important part of your delegation, a vital tool in gaining time. You need to teach your assistant to be able to deal with standard correspondence and attend to the necessary even before it gets to your office. But delegation does not end at your assistant and can even extend as far as outsourcing in appropriate situations.

"The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint enough to keep from meddling with them while they do it."
Theodore Roosevelt

3. Organise your Workplace

Is your office work space and your tools working efficiently for your work flow? I was suffering from the lawyer's eternal problem of too many files in my office, which had ended up spread across my floor. By simply purchasing a multi-tiered wooden unit I was able to organise the files coming into my office into different groups. This improved and speeded up the entire flow of file in and out office as well as improving my mind-set to the files in my offices, they were no longer an unknown mountain of work that sat there intimidating me. This is just an example but look for similar improvements you can introduce into your workspace.

The same can be done with your emails. Set up your Outlook inbox into different relevant folders.

4. Exclude Unnecessary Information

In this information age we often suffer from information overload and need to reduce unnecessary information in our lives:
· Stop junk mail from even getting to you and bin it if it does.
· Unsubscribe to unnecessary publications and email letters (don't dare unsubscribe to this sites updates or you might missing useful articles like this!).
· Delete email once you no longer need.

5. Take Time to Plan

At the same time actively introduce quadrant II activities into your time schedule. Set aside a specific time, perhaps a Friday afternoon, to look at the week ahead and plan and prepare for what is coming up.

"You will never find time for anything. If you want time, you must make it."
Charles Bixton

Acceleration clause

2005-04-25T14:47:00.000+01:00

What is commonly referred to in credit management, as an acceleration clause is a clause in which a creditor granting a debtor the right to repay a debt in instalments agrees the right to proceed for the full debt in the event of the debtor defaulting in the payment of any instalment.

For example, a creditor has payment terms of 30 days and a debtor defaults on his payment terms. The creditor contacts the debtor who, for whatever reason, negotiates an extension of payments terms to pay the debt that was due and payable off over 6 months. In such a scenario the creditor would do well to attached an acceleration clause to such an extended payment terms. The failure to do so will result in the creditor only being able to legal recovery each instalment in the extended repayment agreement as and when it becomes due and payable.

The same thing would apply on a debt where the terms of repayment are agreed up front to be in instalments over a period and such an agreement does not include an acceleration clause.

An example of what an acceleration clause would look like is:

“In the event of the debtor defaulting in any single instalment, the creditor has the right to proceed against the debtor for the full balance of the debt outstanding.”

Such a clause could be included in a credit application incorporating the creditor’s standard terms and conditions of trade, a credit agreement, an acknowledgement of debt or even a letter to the debtor confirming the repayment terms.

So creditors if your allowing your debtors repayment terms, whether its upfront or by later agreement, don’t forget your acceleration clauses.

Advanced Notice on upcoming Law Reports

2005-04-19T07:28:00.000+01:00

I have just received my month advanced notice of what will appear in next month's South African Law Reports from Juta, the legal publishers.

On the credit management front there seems to be oen case with direct interest reported. The headnotes of the revelent case is as follows:

J & K TIMBERS (PTY) LTD t/a TEGS TIMBERS v G L & S FURNITURE ENTERPRISES CC

NATAL PROVINCIAL DIVISION

KOEN AJ

2004 September 6, 16 Case No 103/03

Close corporation—Members—Power of to bind corporation—Close Corporations Act 69 of 1984, s 54—Every member of corporation agent of corporation for all purposes—Whether this so even where corporation had conferred no authority on member—Position of corporation where third party knew or ought reasonably to have known that member lacked power to bind it—Whether reference in s 54 to ‘any act’ including appointment of agent on behalf of corporation.

Management Skills: The Best Advice I Ever Got

2005-04-11T07:01:00.000+01:00

In the 21st March 2005 issue of Fortune Magazine they ran an enlightening article entitled the "The Best Advice I Ever Got". The Article asked the business giants of the world such as Warren Buffett, Richard Branson, Peter Drucker, Jack Welch and many others what was the best advice they ever got was and the answers certainly make for a good insight into the business minds of these greats.

The one that particularly struck me was the chairman of the US based Coffee giant Starbucks, Howard Shultz, who stated his advice came from Warren Bennis who told him:

"that I needed to invest ahead of the growth curve and think beyond the status quo in terms of the skill base, the experience, and the quality of the people around me. He also told me that the art of becoming a great leader is in developing your ability to leave your own ego at the door and to recognize the skills and traits you don't possess and that you need to build a world-class organization."

The thinking there is one that resonates in the thinking of many "management gurus" and is strongly referred to by Jim Collins in this book "From Good to Great" reviewed peviously on this website and listed on the side bar under recommended reading.

On a personal note the best advice I ever got probably came from my mother who always told me (who has on the odd occassion got a bit hot under the collar with certain individuals) :

"The sun always makes a man take off his jacket a lot quicker than a storm."

I always try remember this adage whether I'm involved in negotiations, litigation, dealing with staff and even in my personal life.

Tags: credit management, management

2005-04-06T17:23:00.000+01:00

Kerry Gleesen: The author of The Personal Efficiency Program

Book review: The Personal Efficiency Program

2005-04-06T16:52:00.000+01:00

In terms of personal management or management in general very little is formally taught in the area of the nuts and bolts of getting things done or as some call it time management. Managers and their employees are victims of procrastination and bad organisation. We learn a lot of these getting things done or not getting things done methods, as the case maybe, from those around us and sometimes they are not the best examples. We all know the pitfalls of a messy desk and poor filing system. We end using more energy to sort messes out then get things done.

This is where a very practically orientated book like The Personal Efficiency Program – How to Get Organized to Do More Work in Less Time by Kerry Gleeson proves a great aid.

The mantra of the book is: DO IT NOW!

While other management gurus preach prioritisation when it comes to time management, the simple art of doing something immediately often is the most effective method.

To quote from the book :

“Stop procrastinating. Procrastination eats up more time in the workplace than practically anything else. Do It Now is a key element in helping you to identify where procrastination exists in your work habits and helping you to overcome it. The trick is to be as clever about completing work as you’ve been about avoiding it. Do it once; clear your mind of clutter; solve problems while they’re small; reduce interruptions; clean up backlogs; stop worrying about it; feel better about yourself; do the worst first; and be decisive.”

The author takes the reader from a general work philosophy through to the hands on stuff of the state of your desk, your filing system, organising software, emails and staff meetings. Then onto things such as planning, follow up, managing staff and maintaining your systems.

The book is an easy read and while I did not find all the practical tips personally applicable, I really got a lot out of it and I would recommend it from a personal management as well a management of staff perspective. If you want more details on the book look in the side bar up recommended reading.

Tags: credit management, management, book review

Debt Administrators Fees Cut Back by Court

2005-04-04T10:04:00.000+01:00

There were reports in the weekend newspapers and on today of a Supreme Court of Appeal decision in the case between African Bank and certain debt administrators.

I have not been able to get hold of a full copy of the court's judgment but the gist of the judgment from the Moneyweb report appears to be "that debt administrators are limited to 12.5% for their services. This was after the judge of appeal, Cameron, ruled against the 22.5% fee that almost all attorney debt administrators charge for acting as administrators collecting money from debtors on behalf of creditors." Previously certain debt administrators who were attorneys were charging 12.5% as administration and an attorneys 10% collection commission. The court has now ruled against this practice.

The administration order is a legal solution in terms of Section 74 of the Magistrates Court Act for the poorer debtors with total debt under R 50 000.00 to apply to go under administration and have a legal moratorium on the legal actions against them for debts. This while they pay a fixed month payment to their court appointed administrator who must distribute it pro rata amongst all the debtor's creditors after their basic fee.

By having a very high administration fee the effect has been both to the detriment of the debtor and the creditors - with debts not reducing as fast as they could and debtors having to pay more off over longer periods with increased costs and interest.

Moneyweb goes onto report that: " As a consequence of the ruling, these administrators now potentially face enormous claims from affected creditors and debtors alike. Between 200 000 and 250 000 debtors were on average under administration over the past 3 years. Administrator attorneys have been illegally appropriating fees of up to R12 million per month exposing them to back dated claims of in excess of R400 million plus interest. Monies so recovered will have to be applied to reduce or extinguish the debts of affected borrowers, many of whom might have been able to recover from their difficulties by now, were it not for these unlawful fees taken by their administrators."

De Ridder the executive director of African Bank, the Creditor with took this matter to court, said, “It is not our intention to paint all administrators with the same tarred brush. But those administrators that have been guilty of this practice effectively worsening and exploiting the situation of people who are financially down-and-out must be taken to task.”

Tags: credit management, debt collection, credit law

Increased Household Debt Still Affordable

2005-03-17T13:09:00.000+02:00

The Business Report has an article in which they quote Standard Bank chief economist Goolam Ballim, stating that " debt as a proportion of household disposable income has been rising steadily, climbing to 55.4 percent in the third quarter of last year from 51.4 percent a year earlier."

Ballim goes on to project that " household debt could race past the historic 62 percent attained in 1998 during the Asian financial crisis, which prompted the Reserve Bank to hike interest rates to well over 20 percent.

But he said local banks were unfazed by the risk of consumers defaulting. He attributed the complacency to rising disposable incomes, low inflation and interest rates, and a wealth effect stemming from stock market and property booms."

"Given South Africa's low inflation and interest rates, it does not appear that debt is about to fall under its own weight," Ballim said.

Tags: credit managment, debt collection, consumer spending

Latest from the South African Law Reports

2005-03-17T12:59:00.000+02:00

I have just received my month advanced notice of what will appear in next month's South African Law Reports from Juta, the legal publishers.

On the credit management front there seems to be a number of interesting cases reported. The headnotes of the revelent cases are as follows:

BRINK v HUMPHRIES & JEWELL (PTY) LTD 2005 (2) SA 419 (SCA)

CLOETE JA on behalf of the Court
2004 November 9, 30 Case No 516/03

Contract—Consensus—Mistake—Justus error—Mistake induced by misrepresentation—Appellant signing contract in representative capacity in mistaken belief that no personal suretyship obligation embodied in document—Document itself constituting misrepresentation which induced such mistake—Whether Contract void.

NEDCOR BANK LTD v SAMUEL AND OTHERS 2005 (2) SA 439 (W)

GOLDBLATT J
2004 October 5, 12 Case No 2002/815

Company—Winding up—Creditors—Legal proceedings by creditor against company—Notice to liquidator in terms of s 359(2) of Companies Act 61 of 1973—Creditor’s surety suing company’s sureties on judgment debt—Defendants raising defence that judgment debt invalid by reason of creditor’s non-compliance with provisions of s 359(2)(a) of Act—Whether non-compliance with s 359(2) available as defence only to liquidator.

VERULAM MEDICENTRE (PTY) LTD v ETHEKWENI MUNICIPALITY 2005 (2) SA 451 (D)

GALGUT AJP
2004 August 17, 26 Case No 510/2004

Interest—In duplum rule—Application of—Stricter and more lenient versions of test for applicability of rule set out and applied.

I will give you a brief summary of the cases and there effect on creditors next month when I get a full version of the jdugments.

Tags: credit law, credit management

Debt Collection: Will the real Garnishee Order please stand up

2005-03-16T13:35:00.000+02:00

The term garnishee order has caused some confusion in South African legal debt recovery. The average debtor and salary department mistake an emoluments attachment order for a garnishee order.

An emoluments attachment order is an order granted in terms of Section 65J of the Magistrates Court Act in terms of which an employer ( also referred to as a garnishee, hence the confusion) is ordered to make month deductions from a debtor's salary and pay this to the judgment creditor or their attorneys.

The Garnishee order on the other hand is in terms of Section 72 of the Magistrates Court Act, which authorises an application to attach any debt owed or to become due to the debtor. This is a little used legal debt recovery tool that can be very effective used by a judgment creditor. In fact it is so little used that my legal software supplier dropped in from their bank of precendants, much to my dismay.

I have used this a successful tool to attach amongst other:

commissions of debtors working on commission only,
the proceeds of a sale of property held by a conveyancing attorney,
money held in bank accounts,
money owed for contract work done by the debtor

Note that unfortunately the state is excluded from such attachments.

But in the right circumstances the little known "real" garnishee order can be used very effective in legal debt recoveries.

Tags: credit law, credit management, debt collection

Stats for Civil Cases for Debt for 2004

2005-03-14T07:27:00.000+02:00

The Statistics for civil cases for debt for December 2004 and for the year 2004 as a whole were release by Statistics South Africa on the 24th February 2005.

I will look at the year 2004 as a whole rather than the December alone. One must bear in mind that these figures do not include actions instituted in the High court, which court has jurisdiction where the debt is more than R 100 000.00 and where the parties have not agreed to the jurisdiction of the magistrates court.

Summons issued 1 594 394
(business enterprise & private persons)

Summons issued
(private persons) 1 468 327

The number of civil summons issued for debt for the year 2004 decreased 12.6% compared with the year 2003. The major contributor to the decrease was summons issued in respect of money lent (-5.8%) and goods sold on open account (-2.6%).

Judgments 901 669
(business enterprise & private persons)

Judgments
(private persons) 848 813

The number of civil judgments recorded for the year 2004 deceased by 17% compared with the year 2003. The major contributor to the decrease being judgments recorded in respect of money lent (-7.4%).

In addition the value of the recorded civil judgements for debt for the year 2004 decreased by 10.7% compared with the year 2003.

The figures as a whole are very encouraging, as they show a general downward trend in the year relating to delinquent debts handed over for legal action. This reflects the positive economic performance last year and the record decrease in the interest rates.

Tag: debt stats; credit management

Great Credit Management Website: CollectionIndustry.com

2005-03-10T08:09:00.000+02:00

There is a great credit management website which I have been meaning to tell you about for a while called CollectionIndustry.com.

While its primarily an American site designed for their market, there are alot of very useful and practical articles on collections and credit management which have a global application. An international flavour is added by our very own ubiquitous PIC Solutions - who added a number of practical articles themselves. You will have to register on the site (at no cost) to get all the benefits of the site but you get a worthwhile return in information.

A nice starting article for those of you involved in a collection centre operation would be Lois Brown's "Seven Habits - and Rewards - of Highly Efficient Collections Operations" ( I wonder if Stephen Covey knows about?). The article covers some very practical and useful tips on collection centre policy and stategies, take a look.

In fact I would suggest you bookmark the entire site as a very useful tool for your credit management.

2005-03-09T17:32:00.000+02:00

Bentley Credit Control

Credit Demand at a 13 Month High

2005-03-02T12:59:00.000+02:00

The Business Day report s that "demand for credit surged to a 13-month high in January as consumer spending continued unabated, all but ruling out a cut in interest rates next month."

The article also says "Private sector credit soared 15,22% from a year earlier, after a revised 13,45% gain in December.

Although this was considerably below market expectations of growth higher than 16%, mainly because of volatility in the “investments and bills discounted” category, excluding this category, asset-backed credit grew 17%, compared with December’s growth of 16,12%."

So the combination of the lowest interest rate since the 1980s and tax cuts particularly lower income earners is push up credit demand as speculated in prevuious posting and comments on this site. For the credit management industry the fine art is going to be balancing the supply against this demand. Keeping up with the comptetion's supply of credit to the market without over-exposing your book.

Sport and Business coaching

2005-03-01T06:15:00.000+02:00

Other than my business interests another passion of mine is rugby and after the weekends games this Shark's supporter wasn't a happy chappy.

But being the armchair sports analysis that so many of us are I was thinking about the 2 South African Super 12 rugby matches. Without going into my match analysis it suffices to say that this "expert" attributed a lot of the blame for the 2 losing teams poor performances to the coaches.

This lead my random thoughts over to the fact that coaching with all its sports connotations has invaded the business management arena (sorry got to keep with the sports talk) and I decided to "google" the phrase "business coaching" and came back with an incredible 81 pages of relevent results. The industry is blossoming in the States and has taken root in this country.

The credit management industry in South Africa is not always the most progressive management industry in the country and I wonder how many people out there in management positions have taken a look at their management function from a coaching perspective? I believe that while the term might just be a buzz word, the practice of looking at the management function from a coaching of staff point of view - as opposed to results driven can result in new insight for a manger and better staff relations.

Just a thought but perhaps try reading some of the material on topic - it never hurts to open one's mind to new perspectives.

Budget 2005

2005-02-24T11:08:00.000+02:00

I am not going to make any in depth analysis of the budget, in light of the comments below, I will leave that for the economic experts.

I will however repeat my Ronald Reagan quote from below:

"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

An overview of the Budget can be found at Business Day and the full speech on Business Report.

So from a credit management perspective there will be more disposable income in the hands of consumers and in particular lower income consumers which will translate into greater spending and credit. The same will apply to businesses to a lesser degree, particularly smaller ones. Obviously from a credit perspective one has to be a bit conservative and still follow a prudent credit policy.

Communicating with staff

2005-02-22T18:21:00.000+02:00

I always thought that I was coping out a bit when I communicated with staff via writing, email in particular. I had this image that I should be out there "patrolling the corridors and talking to the troops and being seen" - probably the result of reading too many motivation management books.

It was nice to read on Slacker Manager and Open Loops that I'm not the only manager that likes the email method of communicating with staff. It would appear, according to Bert Webb of Open Loops, that I am visual communicator who prefers writing over verbal communication and in addition that I'm in the majority!

Bert in Open Loop goes on to make a very good observation based on his own organization that:

" With a staff of over 60, most want to tell you information, even though we know that the majority of them are visual. Although this is puzzling at first, it appears that our subordinates still desire visual feedback (in the form of our facial expressions and body language) that we got their message. Even though they insist on giving us verbal information, they are still seeking visual feedback, that human connection. If they dont get it, they dont feel heard. So, like Bren, even though I prefer memos and email, I keep chatting, phoning, and meeting. I alter my schedule to make myself available to them. We make the adjustments so they dont have to. Thats why were able to get things done, which is why we make the big bucks."

Quote for Thought

2005-02-21T08:18:00.000+02:00

" I praise loudly; I blame softly."

Queen Catherine II

Latest from the South African Law Reports

2005-02-17T13:14:00.000+02:00

I have just received from Juta, the legal publishers, an email which sets out the outline of the legal cases I will be receiving in my next month's South African Law Reports. This a pretty neat client service feature.

On the credit management front there seems to be a number of interesting cases reported. The headnotes of the revelent cases are as follows:

IKEA TRADING UND DESIGN AG v BOE BANK LTD 2005 (2) SA 7 (SCA)

ZULMAN JA, FARLAM JA, NUGENT JA, LEWIS JA and PONNAN AJA
2004 March 18; April 1 Case No 77/2003

Mortgage—Notarial bond—Over movables—Requirements of bond registered under s 1(1) of Security by Means of Movable Property Act 57 of 1993—Whether instrument may be varied to create real right availing against third parties.

GELDENHUYS v EAST AND WEST INVESTMENTS (PTY) LTD 2005 (2) SA 74 (SCA)

HARMS JA, NAVSA JA, NUGENT JA, CONRADIE JA and COMRIE AJA
2004 September 9; 17 Case No 359/03

Partnership—Liability of partner for debts of partnership—Joint and several liability—Effect of settlement with creditor by one partner, after institution of action against both partners.

LAND AND AGRICULTURAL BANK OF SOUTH AFRICA v PARKER AND OTHERS 2005 (2) SA 77 (SCA)

MPATI DP, CAMERON JA, BRAND JA, ERASMUS AJA and JAFTA AJA
2004 September 9, 23 Case No 186/2003

Trust and trustee—Trustee—Authority to bind trust—Trust deed requiring three trustees to be appointed whereas trust operating with only two trustees—Whether trust estate capable of being bound before third trustee appointed.
Trust and trustee—Trust—Nature of—Essential notion of trust law, from which further development of trust form to proceed, that enjoyment and control should be functionally separate—Effect of development of certain types of business trusts in which functional separation between control and enjoyment entirely lacking—Family trusts—Effect of debasement of trust form and consequent breaches of trust entailed thereby—Duty of Master.

JAFTHA v SCHOEMAN AND OTHERS
VAN ROOYEN v STOLTZ AND OTHERS 2005 (2) SA 140 (CC)

CHASKALSON CJ, LANGA DCJ, MOKGORO J, MOSENEKE J, NGCOBO J, O’REGAN J, SACHS J, SKWEYIYA J, VAN DER WESTHUIZEN J and YACOOB J
2004 May 11; October 8 Case No CCT 74/03

Execution—Sale in execution—Of immovable property—For trifling debt—Constitutionality of procedure—Failure to provide judicial oversight over sales in execution against immovable property of judgment debtors in s 66(1)(a) of Magistrates’ Courts Act 32 of 1944—Whether constitutional—Constitutionality of s 67 of Magistrates’ Courts Act.
Constitutional law—Human rights—Right to housing—Section 26 of Constitution—Effect of on sale in execution process in magistrates’ courts

I have already given a brief review of the last mentioned case below and I have written an article which refers to the trust case, which I hope will be published on the Bentley Credit Control website (as its too long for a blog posting) as soon as we have overhauled that website and stopped it looking like a time piece from the late 1990s!

As for the other cases maybe I will review them once I have my March 2005 South African Law Report in hand.

2005-02-17T13:00:00.000+02:00

Jim Collins : Author of "Good to Great"

Good to Great by Jim Collins (Book Review)

2005-02-17T12:24:00.000+02:00

As promised the book review of Good to Great: Why some Companies makes the leap...and others don't.

While strictly speaking Good to Great does not fit directly in with credit management, I have taken the liberty of reviewing the book here. I feel that although the book sets out the principles of transforming a good company into a great company, many of these principles can be applied at a management level and even a personal level - besides its a very good read.

Collin's methodology in preparing the book was to set out certain criteria of what amounts to a great company, eg. share earnings, length of success and many others to narrow his study down to 11 US companies. He then also set out objective criteria to get 11 comparison companies as well as a number of companies that achieved "greatness" but did not sustain it for any length of time. From there he and his team analysis exactly what were the consistent factors that transformed these companies good into great.

The results he comes up make for good....um I mean great reading.

Concepts such as what he calls Level 5 leadership, where the CEOs of 11 companies turned out not to be the archetypical charismatic ego driven character but rather a pardox of humbleness coupled with driven ambition FOR the company.

On the topic of paradox he indentifies what he calls the Stockdale Paradox which was well reviewed and commented on in the Bnoopy Blog. If you don't have the time to read that post now it is basically about having the ability to have unmoving faith in achieving the end result without losing the ability to confront the brutual facts of any particular situation, something alot of us do not do in the business as well personal part of our lifes.

There are a number of other great concepts worth looking at such as the Hedgehog concept and the Flywheel. All of these will benefit you whatever the role is you play in your company.

Collin's writing style is as easy as it is griping - not the heavy academic analysis it could have been. I give it 4 thumbs up out of 5.

GDP figures cloud interest rate predictions

2005-02-16T08:23:00.000+02:00

In light of the modest growth in the 2004 fourth quarter GDP figure the Business Day reports revised predictions on interest rate cuts for April 2005 from economic analysists.

Some analysists seem to be pointing to a half a percent interest cut in April on the back of concerns regarding the effect of the stronger rand on exports and the economic growth in general.

Quote for Thought

2005-02-16T08:18:00.000+02:00

"Whether you think that you can, or that you can't, you are usually right. "

- Henry Ford

Is the Sale of Immovable Property by a Creditor Unconstitutional?

2005-02-14T14:35:00.000+02:00

The Constitutional Court case of Jaftha and others v Van Rooyen and others (CCT 74/03)
created a lot of media publicity late last year. The matter was in fact the consolidation of two similar cases where the houses (immovable property) of two impoverished debtors were sold in a sale in execution arising out of judgment debts for very small debts.

The effect of the Constitutional Court decision is not to prohibit the sale in execution of immovable property of a judgment debtor by a judgment creditor but rather to put in a safe-guard to prevent the inequitable result seen in these two cases.

What this means is that any judgment creditor has first got to make an application to court to authorise the sale of immovable property in execution before proceeding down this legal route.

The approach by the court was pragmatic and in my opinion does not impede the bona fide judgment creditor from executing against immovable property should this be justified.

Interest rate remains constant

2005-02-11T13:25:00.000+02:00

The monetary policy committee kept the repo rate, the rate at which the central bank lends money to commercial banks, unchanged at 7.5 percent. This means commercial banks will keep their prime lending rate at 11 percent.

With most analysts predicting a half percent drop in the interest rate, the immediate effect will be a damping on credit demand but with interests rates still at historically low levels in South Africa I anticipate the demand for credit to be uneffected and to continue to grow in the year.

In addition with the government putting pressure on Ispat Iscor to lower steel prices coupled with the anticipated competition in telecommunication prices the signs are there for an economically positive 2005.

2005-02-11T12:43:00.000+02:00

Quote for Thought

2005-02-11T08:00:00.000+02:00

"Giving people self-confidence is by far the most important thing that I can do. Because then they will act."

Jack Welch

Standard Bank leads the Credit Lending

2005-02-10T13:39:00.000+02:00

Business day reports that Standard Bank led the credit granting stakes in the banking sector based on last years figures in credit cards and homeloans.

While the banking industry as a whole grow on the back of the lower interest rates it would appear that Standard Bank's increased market share came at the expense of the troubled Nedbank.

From the credit management perspective it is interesting to note that Standard Bank "... changed its credit scorecards before any of the other banks, allowing it to take on some debt that other banks' scorecards were rejecting." This in light of the post below on Standard Bank introducing the TRIAD system, although it was only reported as being implement this year.

The National Credit Act Cometh!

2005-02-10T08:38:00.000+02:00

The final draft of what was referred to as the Consumer Credit Bill and has now been changed to the National Credit Bill was published late last month. If you would like to download the 213 page behemoth its available in MS Word at The Parliamentary Monitoring Group website.

The proposed purpose of the Bill is to provide consumers with protection and prevent certain unfair credit practices, to replace the Credit Agreement and Usuary Acts, governing certain aspects of the credit bureaux and promote responsible credit granting.

While the stated purposes are on the whole good, the means of obtaining these was always going to be controversial with the various interested parties. Issues like the fact that the policy document upon which this bill was supposedly based was only published late in the day did not matters easier.

From a legal perspective the Credit Agreement and Usuary Act are poorly drafted pieces of legislation that have passed their "sell-by" date. But the new proposed legislation is not going to be a contender in the most erudite piece of law competition. The convoluted defintions have had me jumping around the bill like a cricket on steroids.

That's just the structuring and interpretation of the Bill, not its content.

As far as the content of the Bill goes issues like the creation of yet another government bureaucracy in the form of the Credit Regulator and Tribunal with their administrative burden on credit providers, particular small business - is something that should have been avoided or at least streamlined.

Other issues like the practicial effects of the manner of regulating the credit bureaux while at the same time trying to promote responsible credit granting have not been very well thought out.

There are numerous other issues raised by credit providers and business that need to properly considered in this piece of legislation. But unfortunately I think with this being the "final" draft of the Bill we are pretty much seeing what will become the Act and law and what the credit management community will have to live with.

Tag: credit management; National Credit Bill; credit law

Reading books about business

2005-02-09T07:58:00.000+02:00

There is a great post on the blog site Slacker Manager entitled, "How to read a business book" which makes for a good read.

I certainly believe in the power of opening your mind to new business and management ideas by reading on the subject of business and management.

I am currently reading Good to Great by Jim Collins which was inspired by my reading of another blog post . I am throughly enjoying the book and hope to post my first book review here soon. I even noted watching an interview of the S.A. Unilver Foods CEO, Kees Kruythoff, on Summit T.V. that he was deeply influenced by the concepts contained in this book.

So watch this blog for a post on my take on Good to Great.

Increased Competition in Credit Insurance?

2005-02-08T13:48:00.000+02:00

Following on from the previous post it was reported in Business Report on the 3rd February 2005 that "French company Coface, the world's third-largest credit insurance company, (are) buying 100 percent of local credit insurance firm Credit Underwriting Agency Limited (Cual)."

For years Credit Guarantee has dominated the market with nearly an 80% market share but the introduction of a strong foreign competitor can only mean good news for credit insurers.

It should be interesting to keep an eye on the credit insurance market and if the introduction of another major player impacts on premiums.

CGIC accorded AA rating by Global Credit Ratings

2005-02-08T13:33:00.000+02:00

Credit Guarantee Insurance Corporation, the largest local provider of credit insurance, was accorded double A status by the International rating agency, Global Credit Rating Co. (GCR) - according to CGIC's website.

According to the press release "the rating signifies a very high claims paying ability, with strong protection factors. Risk is modest, but may vary slightly over time due to economic and/or underwriting conditions".

Standard Bank Adopts Fair Isaac`s TRIAD System

2005-02-08T13:15:00.000+02:00

Standard Bank has changed over to Fair Isaac's TRIAD system in its credit card division.

The TRIAD system according to PIC Solutions, the local distributor of the system, " integrates predictive analytics, decision-making software, expert strategy consulting and the most advanced decision engine technology to help lenders automate and execute account management decisions across the enterprise. "

It is most certainly now the dominate software system in the local credit granting market with a large number of the major players having adopted it.

Leisurenet Liquidators take Legal Action against Accountants

2005-02-08T08:01:00.000+02:00

In the post Worldcom-Enron business environment it would appear that professional accountant firms are being held to a higher degree of liability.

One of the results of this can be seen here in South Africa where the liquidators of Leisurenet have accounced legal action for damages of R 150 million against Deloittes.

It will be very interesting to see the outcome in South Africa where our law differs from that of the Unitied States and the courts have traditionally been alot more conservative in the area of damages.

2005-02-07T16:07:00.000+02:00

Brett Bentley

Quote for thought

2005-02-07T13:18:00.000+02:00

" The first responsibility of a leader is to define reality.
The last is to say thank you.
In between, the leader is a servant."

--- Max De Pree

School Fee Collection Workshop - Durban

2005-02-07T13:00:00.000+02:00

Following Bentley Credit Control's very successful seminars last year in Durban, Johannesburg and Cape Town we will again be hosting our School Collection Workshop, firstly in Durban.

Date: 4th March 2005

Time: Registration begins at 8:30am for a 9:00 am start and the workshop will finish at approximately 12.30pm with a finger lunch.

Venue: The Durban Country Club
101 Walter Gilbert Road,
Durban

Cost: R 450 per person - 3 or more persons from any particular school qualify for a discount down to R400 per person

Who Should Attend: Principals, bursars, school collection staff and governing body members.

Presenter : Brett Bentley

Agenda :

1. Welcome
2. Methods and procedures for school collection staff in collecting outstanding fees.
3. The legal position of parents/guardian liability for school fees
4. Handing over for collections
5. Attorneys vs. debt collection agencies in collections
6. Tea Break
7. Understanding the legal steps in debt collection
8. General questions and answers
9. Lunch

If you would like to book email me on bentley@law.co.a

S.A. Liquidation and Insolvency Stats for Dec 2004

2005-02-07T11:26:00.000+02:00

Stats SA released the stats for liquidations and insolvencies for the month of December 2004 for South Africa on the 2nd February 2005.

Insovencies of individual continued their downward trend with figures given for the month of November 2004 down to 117, down 47.8% on November 2003.

Liquidations of companies and close corporations on the other hand for December 2004 were at 257 up 31.8% on December 2003 but still on a general downward trend.

The general positive trend can be attributed to economic growth and the decease in interest rates which is favouring both individuals and businesses.

S.A. Liquidation and Insolvency Stats for Dec 2004

...

Welcome!!

2005-02-04T15:29:00.000+02:00

Well this is my first post on this blog.

The aim of this blog is to provide an information service to those in the credit management industry in South Africa.

So the areas that this blog will cover will be credit law, debt recovery, general management and all other aspects of credit management in South Africa.

I trust the site will grow from strength to strength.