ONLINE credit lender wanna loan? said on Monday it supported tighter regulation for the industry and that the National Credit Amendment Bill would help to rid the sector of “unscrupulous lenders” that have tarnished its reputation.

However, CEO Nathan January said the amendments could also remove the “benefit of automation” that the online platform provides.

The amendment bill, which imposes stricter rules for lending institutions, was presented in the National Assembly last month, and is set to come into effect just before the May 7 elections.

The Banking Association of South Africa said earlier this year that it was concerned that the bill would allow too much government intervention in the banking industry.

The bill aims to tighten control of reckless lending but the banking industry would prefer to have this incorporated in its self-regulated codes of conduct.

Cape Town-based wanna loan? is positioning itself as the standard-bearer for responsible lending and said tighter regulation would protect consumers from reckless lending that leads to overindebtedness.

In the past, observers have said it is too easy for South Africans to take on too much debt, and some creditors have been taking advantage of desperate consumers.

The National Credit Amendment Bill also deals with the regulation of affordability assessments by the trade and industry minister, as well as debt counselling.

Mr January said the proposals would give consumers more protection and encourage competitiveness.

“But that is not to say there aren’t aspects of the bill that will not adversely affect consumers,” he said, referring to the loss of the benefits of automation such as quick turnaround times for loan applications. “Essentially what this means is innovation will be taken back to an era when customers will be required to submit documentation manually.”

He said 85% of South Africa’s 21-million credit active consumers accessed credit from banks.

Wanna loan? markets itself to the balance of the population, mostly customers who are in full-time employment and earn above R10,000 a month. They have access to the internet and can apply for credit of R500-R3,000 “24/7” via encrypted web and mobi sites.

Mr January said the proposal to impose more stringent affordability assessments would negatively affect these consumers in three ways: convenience, user experience and turnaround time.

This might in fact lead to the unintended consequence of pushing some consumers to informal borrowing, exposing them to more risk. He said this proposal should be reviewed or scrapped.