Companies are now sending employees on NCA courses to beat the debt trap

AFTER a five year heyday in skills training, South African companies that started cutting back severely on training budgets in the first half of this year are now trying to use training to improve staff efficiencies and beat bad debt.
Many companies are putting staff through training courses to learn more about the National Credit Act and to use it's mechanisms to help to reduce recessionary pressures, especially encouraging staff to become more financially astute in the workplace and at home.

"We are seeing a dramatic rise in companies sending staff on to courses, especially to learn financial management skills and to learn the ins-and-outs of the National Credit Act (NCA)," says Liza van Wyk, CEO of BizTech a Johannesburg-based training company.

"Economists agree the NCA has cushioned South Africa against some financial blows, but companies are also tightening up financial management and are showing heightened interest in ensuring managers, executives and administrators hold a tighter rein on cash flow, and have the skills to improve financial assets."

According to numerous surveys, South African staff have poor financial literacy, and as bad debt rockets, retrenchments rise and companies collapse, leading to a predicted R60 billion shortfall in tax collection, companies now realise that South Africa will not avoid a very serious recession.
After five years of upward growth most companies have found the first six months of 2009 exceptionally painful.

"At first they followed tried and failed remedies of cutting back on staff and skills, but now we are seeing more executives, managers and administration staff going on skills and executive training courses to improve financial skills in particular," Van Wyk says.

"It is difficult to say precisely what is driving this, but there are probably a number of factors; there are so-called greenshoots breaking through the financial devastation Europe and the US has experienced, but there is also a realisation that endless staff cutting starts impeding the ability of companies to recover and grow. What is needed is highly skilled, motivated staff to steer a company through troubled waters."

Van Wyk said that there was particular interest in their course on the NCA.
"The National Credit Act since inception in 2006, has stopped many consumers from getting into the vicious cycle of debt.

"Initially companies complained that the act was eroding their capacity to give loans and get new clients, and now many are relieved that it has actually cut their bad debt and are looking for new ways of using the act to ensure their staff know how to use it to prevent client bad debt, but to also promote financial wellness in the workplace.

"Our course ensures that delegates attending leave with an understanding of the act, its purpose, how companies comply with the act and how to apply it in their everyday lives.

"There are too many cases of people signing away their cars or waiting too long before they seek help."

Van Wyk cites the case of Stella Coetzee, a debt counsellor for debt counselling organisation ConsumerAssist in Cape Town. "She tells of a single parent, a 35-year-old nursing sister from Wynberg Hospital who was too embarrassed to discuss her financial problems and was not aware that a debt counsellor could help her. The result is that her car was repossessed.
"People do not know that their assets are protected because of the NCA if they seek assistance from a debt counsellor."

The negative impact of people being hounded by creditors or losing their vehicles or homes is that productivity in the workplace collapses and so many companies send key staff onto the NCA course to help inform other staff members on measures to protect them.

Major companies like Woolworths, BMW, Absa and others have significant programmes to assist staff and clients avoid the negative consequences of bad debts."

The National Consumer Forum recently held their 2009 conference in Midrand and they made the following statement:

"After years of promoting and profiting from excessive consumer borrowing and buying on credit, all players in the financial services sector … must ensure that those now trapped in a debt cycle are not simply abandoned."
Van Wyk says BizTech stands by The National Consumer Forum's plea for all parties concerned, including the government, to channel more resources into educating consumers on financial matters. "The National Credit Act is there to protect companies and consumers and ultimately economic growth."
Van Wyk also alludes to a recent speech by Finance Minister Pravin Gordhan who noted: "Our financial institutions have not had to endure the same kind of corrective process that banks in the other countries have had to undertake. The combination of prudential regulations, banking regulations and the introduction of the National Credit Act served to moderate the desire to indulge in risky business practices."

Van Wyk is encouraged by more companies, "paying closer attention to well-drafted legislation and using it to begin their own economic turn-around which ultimately will have a positive impact on the economy. Nothing will advance growth more than a stronger skills base and more productive staff."
· The next BizTech National Credit Act course will be held in Johannesburg on August 17 and 18. Delegates attending will receive a training manual, CD and one month telephonic support relating to the course content.
For more information call BizTech at 0861 249 8324 or visit www.biztech.co.za