In this episode of Spirit of The Law, Ada Ama-Njoku and her guest Mr Jaco Hamman discuss the fairness of the credit system.

Mr Hamman starts the by answering whether the credit system is fair or not. He explains that credit is based on trust, and the credit provider agrees with the consumer on the product to be sold on credit and in return, interest is charged. He says, ”The reason why the credit provider gets the interest, is because of the risk of the product leaving the stock without full payment from the consumer, and it may be a loss if the consumer does not pay.” Watch the first part of the video to see what more he had to say concerning the fairness of the credit system.

In March 2015 the National Credit Act instructed that credit providers should issue an affordability assessment form, this helps the consumer to have a budget (Financial plan), and it sets out what the income of the consumer is, as well as the expenses and it also helps the credit provider to know whether the consumer can afford the facility. In the second part of this video, Ada Ama-Njoku tells us the reasons why she thinks the credit system is not fair.