Does the National Credit Act apply?
Does the National Credit Act apply?

The National Credit Act was passed mainly to protect the consumer. It applies to all juristic persons (with limitations) and to all natural persons (even if they are a sole proprietor). It also applies to trusts that have two or fewer trustees (unless one of the trustees is itself a juristic person). The NCA does not apply to large juristic persons, that is those that have an annual turnover or asset value in excess of ZAR 1 000 000 (one million)

Definitions Used By Cred-It-Data

  • “NCA” – National Credit Act 35 of 2005
  • ZAR – South African Rand
  • “Small transaction” – principle debt of less than or equal to ZAR 15,000
  • “Medium transaction” – principle debt of between  ZAR 15 000.01 and  ZAR 249,999.99
  • “Large transaction” – principle debt greater than or equal to ZAR 250,000
  • “State” – Part of government of Republic of South Africa
  • “Arms length” – An arm’s length transaction is a transaction in which the buyers and sellers of a product act independently and have no relationship to each other. The concept of an arm’s length transaction is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party.
  • “Credit agreement” – In order for the agreement to be classified as a credit agreement for purposes of the NCA, it must have two essential elements: credit must be extended; and there must be a fee, charge or interest imposed for deferred payment, or a discount must be given when prepayments are made.
  • “juristic person” – The Act defines a juristic person as a partnership, association or other body of persons corporate or unincorporated. A juristic person under the Act would include a trust with more than two trustees or where a trustee is itself a juristic person but not a sole proprietor.
  • “subject” – The person/company in question


  • True rental agreements are not credit agreements for the purposes of the NCA. This means that a consumer entering into a true rental agreement is not governed by the NCA. Must carry a true residual value
  • Large transactions
  • State 

Following provisions of the Act do not apply to juristic persons/consumers:

  • Over-indebtedness and reckless credit.
  • Credit marketing practices.
  • Illegality of variable interest rates, except if pegged to a reference rate such as the prime overdraft rate.
  • Limitations on credit charges (particularly the prohibition on interest not exceeding the capital sum owing).

How To Decide ?

Follow the decision map to get your answer.


** Do you have sufficient proof the turnover or asset value is less than ZAR 1 Million


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