Debt discount scheme pays off for E Cape municipality

Saturday, March 5, 2011

East London - An Eastern Cape municipality has collected nearly R3.4 million in outstanding debt since the introduction of an innovative scheme introduced last year. 

The Buffalo City municipality in East London launched the Pay-Your-Debt scheme in December last year, in the hopes of getting consumers to settle their debts.

"Due to the world economic meltdown, which has impacted negatively on the city's revenue, the council decided to incentivize paying outstanding municipal accounts," said municipal spokesperson, Samkelo Ngwenya.

The scheme guarantees debtors up to 50 per cent off their debts if they make arrangements to settle their outstanding accounts before 30 April this year.

"The scheme seeks to encourage not just domestic debtors, but also business debtors to pay their municipal accounts," said Ngwenya.

Self-employed mother of one, Zandiswa Mbanga (58), said she was happy when she heard about the municipality's scheme.

"I was battling to pay my debts, which just kept growing. I didn't have the full amount and the 50 per cent off helped me a lot," said Mbanga.

Since the scheme was launched, the municipality has collected nearly R3.4 million in outstanding debt.

Municipal debt management department spokesperson, Leon van Wyk, said he is hoping that in the two months left, the department will collect even more.

"In order for the scheme to assist the city's economy, a lot more needs to be paid than what has been paid to date. Debtors need to respond and settle their debts," said van Wyk.

Ngwenya added that settling outstanding debt would also mean service users won't end up having their accounts being blocked unnecessarily. - BuaNews