The NCA or the National Credit Act is legislation that governs credit in South Africa. The NCA
was compiled primarily to protect the consumer. The aim of this act is to, among other
things, promote a fair, non-discriminatory marketplace as well as improve the standards of
the consumer credit industry. This means it aims to prohibit unfair practises as well as
encourage responsible credit granting. Access to credit has been relatively easy and there
have been instances where the lender should not have been granted credit due to his
affordability. Fortunately, with the NCA in place, consumers are able to make informed
decisions before they commit to accepting credit.

The main aim

First signed into law in 2005, the Act mainly limits the potential for South Africans to borrow
too much and prevent credit providers such as banks from engaging in irresponsible lending.
The act establishes rights for consumers, and this includes providing measures that enable
them to make informed decisions. Another aspect of the NCA is that it places a greater
responsibility on credit providers to refuse credit to those who cannot afford it and
regulates how credit bureaus should do business.

How does it affect you?

Every credit provider needs to be registered with the NCA. When you apply for credit, the
credit provider must give you a quotation detailing the following:
 the full cost of the credit
 ongoing costs
 initiation fees
 fixed or variable interest rate
 the annual interest rate expressed as a percentage and as a rand amount
 any residual or final amounts payable at the end of the period,
 the number of instalments and the amount of each instalment
 delivery and installation charges, as well as connection fees, taxes, license or
registration fees

 the nature and cost of any additional insurance and the consumer’s right to waive
such insurance and replace it with a policy of their choice.
As with any right, there is also a responsibility. The NCA expects the following
responsibilities from you the consumer: providing them with honest and factual
information, as well as paying for services rendered and goods received according to your
credit agreement.

If you are interested in more about the NCA, speak to One Debt today.