After an investigation into reckless lending by the National Credit Regulator, African Bank has agreed to pay a R20 million fine.
It was earlier uncovered that African Bank lent millions of Rand recklessly. Initially the Credit Regulator a R300 million fine for African Bank's reckless lending practices. However, after a settlement has been reached between the Regulator and African Bank the fine was reduced to R20 million.
In the layman's language reckless lending takes place if a consumer is granted credit without the credit provider making sure that the consumer can afford it, or if credit is granted while the credit provider knows that the consumer cannot afford the credit. In short reckless lending may also result in debt being written off.