Page 47 - Nexia SAB&T Business in South Africa Guide 2024

NATIONAL CREDIT ACT, 34 OF 2005

The National Credit Act (the NCA) became fully operative on 1 June 2007 and is
designed to protect the consumer against unlawful credit provision. The National
Credit Regulator is responsible for the registration of industry participants,
research, public education, investigation of complaints and enforcing NCA
compliance.
The NCA creates a responsibility on credit providers to refuse to give the
consumer (borrower) credit if he cannot afford it. The NCA generally applies to
every written credit agreement between parties dealing at arm’s length and made
in, or having effect in, SA. A credit agreement is defined as a credit facility, credit
transaction, credit guarantee, or any combination of the three. The Regulations
of the NCA specify the maximum interest rates and transaction fees that can be
charged on credit agreements or loans.
Registration of Industry Participants
All industry participants (credit providers, credit bureaux and debt counsellors)
must be registered with the Regulator. If they have not registered as such, they
cannot extend credit or trade as a credit provider.
Further Consumer Rights
The right to apply for credit, to be protected against discrimination in the
granting of credit, to be informed of the reason why the application for credit was
refused (if requested), to receive a credit agreement in plain, understandable
and an official language, and to receive a copy of the credit agreement and a
replacement copy when requested.
The National Credit Amendment Act, 7 of 2019 provides for additional
protection to low-income consumers from over-indebtedness by either
re-arranging, suspending or extinguishing (partially or wholly) their unsecured
credit debts during a period of four years from the commencement date,
which can be extended.

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