All South African credit providers are required to register under the National Credit Act to avoid clients being scammed or cheated in any loan agreement.
The blanket regulation came into effect on the 11 May this year.
Before this, a person was required to register as a credit provider under the National Credit Act 34 of 2005 (the Act), if the total principal debt owed to that party under all outstanding credit agreements exceeded R500,000 (or if they are the credit provider under at least 100 credit agreements).
Nthopeng Mokgolego Senior Legal Advisor at National Credit Regulator (NCR) says “It doesn’t matter how many credit agreements you are entering into in a year, and it also doesn’t matter the amount of loans you are granting in a year. Before you can operate legally you must be in possession off a license that is issued by the national credit regulator.”
She says the purpose of the act is to bring all credit granters under the supervision of the NCR, especially ‘mashonisa’ [unscrupulous lenders]
This article first appeared on 702 : How the new National Credit Act may help protect you from fraudulent lenders