Abstract
South Africa is a country that is deeply rooted in inequality. This is not surprising given the country’s history of apartheid. Inequality is evident in the credit market too. Before the promulgation of the National Credit Act, a majority of the country’s population was excluded from participation in the credit market through exorbitant interest rates. It need not be mentioned that the majority populace referred to are the middle- and low-income class Blacks.
The NCA was promulgated to include historically disadvantaged individuals in the credit market. The purposes of the act are detailed in section 3 of the act. One of the purposes being protection of consumers of credit against creditors and vice versa. Inclusion into the credit market means limiting the cost of credit given the fact that the historically disadvantaged individuals are mainly categorized by the poor and low-income earners.
The NCA must be interpreted purposively, contextually with due regard to the values underlined in the Constitution. When interpreting the NCA, an interpretation closest to the purposes set out in section 3 of the act will be favored. This means that an interpretation that implies limiting the cost of credit must be favored when it comes to the question of choosing a forum to litigate in.
The magistrate’s court has unlimited monetary jurisdiction in all NCA related matters with the high court having concurrent jurisdiction with the magistrates’ court. A litigant has a choice of forum when instituting a matter. Litigation in the high court is very costly compared to litigation in the magistrates’ court. The historically disadvantaged individuals are categorized as poor and low-income earners who cannot afford to litigate in the high court.
It only makes sense to further the objects of the NCA by requiring that litigation in NCA related matters be instituted in the magistrates’ court. This choice must be made with the country’s history of inequality in mind. This can only be achieved through the application of a concept referred to as transformative Constitutionalism. Transformative Constitutionalism provides that in order to redress past imbalances, transformation is required wherein the court must move away from the traditional method of applying and interpreting the law. It vests the duty of transformation in the hands of judges and the legislature. According to transformative Constitutionalism, protection of consumers of credit should not end with the capping of interest only, all related costs of credit must feature in this too.