What is the National Credit Amendment Act and how does it affect me? [Video]
14 January 2016
The National Credit Amendment Act regulates the credit industry in South Africa and protects both borrowers and lenders.
It is overseen by the National Credit Regulator who is responsible for monitoring compliance with the Act and ensuring that the public is made aware of their rights. The aim of the Act is to promote transparency, to prohibit unfair contractual terms and practices and to prevent anti-competitive practices.
Credit providers need to ensure that they are not reckless in granting credit, and must follow a series of steps to satisfy compliance. The credit provider must assess whether the borrower understands the risks and costs of the credit as well as their rights and obligations in terms of the agreement.
The borrower’s credit history must also be investigated to see whether he or she has a proven track record in paying back credit. The creditor must give the borrower a pre-agreement statement which details all the terms of the loan, a copy of the credit agreement and a regular statement of their account.
The borrower must give a full disclosure of their total monthly income and give proof of it with three recent payslips or bank statements. Household and education costs would also need to be disclosed and details of any other credit agreements held.