There are mixed feelings over what the attorney general, Rama Valayden, has qualified as a “revolutionary bill”. Although all stakeholders agree that this is a step in the right direction, some of them point at certain loopholes. The minister of Finance, Rama Sithanen, will introduce in Parliament tomorrow a bill expected to protect borrowers. He also speaks of revolutionary measures to protect debtors while making sure that financial institutions continue to lend money to the most vulnerable members of society. There was a need to reach a balance between the suffering of debtors and the interests of banks. The government appears convinced that it has reached this objective with the bill although it is “complex and risky”, as Sithanen puts it.

The main satisfaction for the “victims” of the sale by levy system may be the fact that chances are low that people will lose their house or property if they can’t pay their debts. “Seizure of properties is now the last resort,” stated the attorney general. There will be different possibilities of finding a solution to the problem of debt repayment before the decision is made to seize a debtor’s property.

As the new bill plans the appointment of a commissioner as mediator, the owners of the house will be able to choose to sell their property themselves under supervision of this commissioner. If it is not sold in due time or if the price offered does not reflect the real value of the property, then sealed offers can be considered. But if the commissioner is not satisfied with the price proposed, then he can sell the property to the highest bidder.

<B>Debt rescheduled in certain cases</B>

The commissioner will also have the power to see whether debts can be rescheduled. The new bill indeed makes provisions for debt rescheduling in case of serious disease, job loss, death of one of the wage earners in the couple or any other serious difficulties that could prevent debtors from repaying their debts in due time. The commissioner will also be responsible for stating whether a contract is considered “improper” or not.

Harish Boodhoo, who has been leading a real crusade to help those whom he considered to be victims of the sale by levy, is satisfied with the fact that debtors will no longer have to pay the 10% fee to the attorney in charge of the debt collection. According to the president of the Law Society, Narendra Appajala, “it will now be up to the creditor to pay the fee because he is the one to employ us to start such procedures for debt collection. But will they accept to do it? They will have to pay for something that the debtor has done”.

If Harish Boodhoo is satisfied with this measure, he however regrets that the penalty rate and compound interest of the banks have not been abolished. He claims that those who can’t pay will be in an even more serious situation with these excessive rates. “I wonder whether the banks are not the big winners in this bill. What I feared the most has finally happened,” he commented. Narendra Appajala seems to share his view on this topic.

The president of the Law Society is also sceptical about the fact that this bill will affect only those who borrow less than Rs 2 million. “This bill creates two different categories of citizens. The ones who can borrow up to Rs 2 million and the others who can afford to borrow more than Rs 2 million. I find it weird that discrimination is done between the citizens of Mauritius (…) According to the Constitution, the law should protect all citizens without any discrimination,” he said in an interview to l’express last Saturday.

However, the government looks convinced that this bill is one of their best achievements. It had promised that it would come forward with a law to stop sale by levy – or at least reduce it – and it is satisfied that it has managed to do so. “There have been many lobbies to prevent us from coming forward with a bill to protect borrowers,” revealed Rama Sithanen in his press conference last week. But, thanks to more transparency and information given to borrowers, the government is confident that their objective of protecting the most vulnerable members of society will be achieved with this new law. Meanwhile, discussions promise to be lively in Parliament tomorrow!