Which credit agreements are not applied to the NCA?

For the purposes of this question, a credit agreement is a large agreement if it is a mortgage agreement. Therefore, the NCA will not apply to commercial property lending, unless the consumer is a natural person.

What is National Credit Act No 34 of 2005?

The National Credit Act 34 of 2005 intends: to promote a consistent enforcement framework relating to consumer credit; to establish the National Credit Regulator and the National Consumer Tribunal; to repeal the Usury Act, 1968, and the Credit Agreements Act, 1980; and.

Does the National Credit Act apply?

The National Credit Act (NCA) applies to credit agreements with all consumers and to entities such as close corporations, companies, partnerships and trusts whose asset value or annual turnover is below a prescribed threshold (currently R1 million).

What is excluded from the scope of the National Credit Act?

The National Credit Act excludes transactions not made “At arm’s length”. A credit agreement between a juristic person (business) and someone who has controlling interest in that juristic person. A credit agreement between family members. A credit agreement between parties who are dependent on each other.

Who does the National Credit Act apply to?

Consumer: is a natural or juristic person that purchases goods or services on credit, or borrows money under a credit agreement. However, the NCA will only apply to a juristic consumer whose annual turnover or asset value is less than R1 000 000 at the time of entering into the credit agreement.

What is unlawful credit agreement?

The Act determines that, in certain instances, a credit agreement in its totality could be rendered unlawful. This occurs when the entire principle under which the contracts were concluded are unlawful and the Act regards these contracts as void from the day they were entered into.

What is the main purpose of the credit agreement Act?

The Act has three main purposes, in terms of section 3; to promote and advance social and economic welfare of South Africans; to promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumer.

Can an unlawful credit agreement be enforced?

If a Court declares a credit agreement to be unlawful, all its provisions are unenforceable, the consumer is not required to return any goods or money received from the credit provider under the agreement and the court may either order the credit provider to return all money received from the consumer under the …

How can a business comply with the National Credit Act?

Ways in which a Business can comply with the National Credit Act (NCA). Submit an annual compliance report to the National Credit Regulator. Obtain credit records/checks of clients before granting loans. Conduct credit affordability assessments to ensure that clients are able to meet their obligations on time.

What is the National Credit Act in South Africa?

In general terms, the National Credit Act (the Act) aims to transform the South African credit market and all consumer credit providers are required to comply with the Act.

What was the National Credit Act of 2005?

34 of 2005 The National Credit Act 34 of 2005 intends: to promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to provide for the general regulation of consumer credit and improved standards of consumer information;

When was National Credit Act No.34 passed?

NATIONAL CREDIT ACT NO. 34 OF 2005 NATIONAL CREDIT ACT NO. 34 OF 2005 [View Regulation] [ASSENTED TO 10 MARCH, 2006] [DATE OF COMMENCEMENT: 1 JUNE, 2006] (Unless otherwise indicated) (English text signed by the President) This Act has been updated to Government Gazette38557 dated 13 March, 2015.

When does the National Credit Act apply to a consumer?

The Act applies where a credit provider enters into a credit agreementwith a consumer. In order to determine to which transactions the Act applies, one needs to consider two definitions. Firstly, who would be a ‘consumer’ for purposes of the Act, and secondly, which agreements are classified as ‘credit agreements’ in terms of the Act.