Must lender register?

2016-08-17 06:00


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I RUN an informal money lending business. A friend told me that even small credit providers must now register with the National Credit Regulator. I hardly lend more than R200 000 per year and have not had to register in the past. Is this true?


Your friend is correct in principle, although there are exclusions. The Department of Trade and Industry has published a notice determining that the threshold for registering as a credit provider with the National Credit Regulator (NCR) is now R0. Prior to this notice, the National Credit Act (NCA) required you to register as a credit provider if the total principal debt owed in terms of all current credit agreements exceeded R500 000. Consequently, credit providers who lend money in terms of the Act must now apply to be registered with the NCR.

However, it is important to remember that the Act does not apply to certain juristic persons, specifically excluded in the NCA, as well as persons who are not “at arm’s length”. Any loan which does not include interest or a fee for late or deferred payment will not fall under the definition of a “credit agreement” in the NCA and registration as a credit provider will not be required.

The Act provides that the threshold will take effect six months after the date on which it is published in the Gazette, namely 11 November 2016. Accordingly, if you are required to register for the first time due to the new threshold, you must apply for registration before 11 November 2016.

In order to register as a credit provider, you must submit an application to the NCR. If your application complies with the NCA and you meet the criteria as set out in the NCA, the NCR will register you. Your application will have to be accompanied by an application fee and a prescribed registration fee.

– Kitso Tshipa, Candidate Attorney, Phatshoane Henney Attorneys


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