QUESTION ONE

ABC Credit Solutions is a financial institution operating in South Africa. They have received

a credit application from Mr$.$ John Smith, a $32-$year$-$old individual working as a software

developer. Mr$.$ Smith is seeking a personal loan of R$50,000$ to cover unexpected medical

expenses and home repairs.

Applicant's Financial Profile:

Income: Mr$.$ Smith earns a monthly salary of R$30,000.$ He has been with his current

employer for five years and has a stable employment history.

Credit History: Mr$.$ Smith's credit history reveals a few late payments on his credit

card and a previous personal loan, but no defaults or judgments. He has maintained

a credit score of $675,$ indicating fair credit.

Existing Debt Obligations: Currently, Mr$.$ Smith has an outstanding credit card

balance of R$15,000$ and a car loan with a remaining balance of R$20,000.$ These

debts represent his existing financial obligations.

Applicant's Loan Purpose and Repayment Plan:

Mr$.$ Smith intends to use the R$50,000$ loan to cover medical bills and essential home repairs.

He has outlined a repayment plan, committing to monthly installments of R$2,500$ for a $24-$

month term.

$1\mathrm{.}1$ Explain the key factors that ABC Credit Solutions should consider when assessing

Mr$.$ Smith's creditworthiness under South African credit laws.

$1\mathrm{.}2$ Conduct an assessment as to whether Mr$.$ Smith loan application should be granted

or rejected.

$1\mathrm{.}3$ Draft a letter to Mr$.$ Smith informing him of your decision.

$1\mathrm{.}4$ Explain to Mr$.$ Smith at least $5$ of his rights in terms of the National Credit Act $34$ of

QUESTION TWO

Provide a detailed explanation of the following:

$2\mathrm{.}1$ The five $(5)$ advantages of using Trusts for doing business.

$2\mathrm{.}2$ Explain the concept of a 'trustee's fiduciary duty' in South African trust law.

Discuss the key elements of this duty, how it applies to trustees, and the

consequences of breaching this duty.