National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 1 : Interpretation, Purpose and Application of Act

Part C : Classification and categories of credit agreements

8. Credit agreements

1)        Subject to subsection (2), an agreement constitutes a credit agreement for the purposes of this Act if it is-

a)        a credit facility, as described in subsection (3);

b)        a credit transaction, as described in subsection (4);

c)        a credit guarantee, as described in subsection (5); or

d)        any combination of the above.


2)        An agreement, irrespective of its form, is not a credit agreement if it is-

a)        a policy of insurance or credit extended by an insurer solely to maintain the payment of premiums on a policy of insurance;

b)        a lease of immovable property; or

c)        a transaction between a stokvel and a member of that stokvel in accordance with the rules of that stokvel.


3)        An agreement, irrespective of its form but not including an agreement contemplated in subsection (2) or section 4(6)(b), constitutes a credit facility if, in terms of that agreement-

a)        a credit provider undertakes-

i)          to supply goods or services or to pay an amount or amounts, as determined by the consumer from time to time, to the consumer or on behalf of, or at the direction of, the consumer; and

ii)         either to-

aa)      defer the consumer’s obligation to pay any part of the cost of goods or services, or to repay to the credit provider any part of an amount contemplated in subparagraph (i); or

bb)      bill the consumer periodically for any part of the cost of goods or services, or any part of an amount, contemplated in subparagraph (i); and

b)        any charge, fee or interest is payable to the credit provider in respect of-

i)          any amount deferred as contemplated in paragraph (a)(ii)(aa); or

ii)         any amount billed as contemplated in paragraph (a)(ii)(bb) and not paid within the time provided in the agreement.


4)        An agreement, irrespective of its form but not including an agreement contemplated in subsection (2), constitutes a credit transaction if it is-

a)        a pawn transaction or discount transaction;

b)        an incidental credit agreement, subject to section 5(2);

c)        an instalment agreement;

d)        a mortgage agreement or secured loan;

e)        a lease; or

f)          any other agreement, other than a credit facility or credit guarantee, in terms of which payment of an amount owed by one person to another is deferred, and any charge, fee or interest is payable to the credit provider in respect of-

i)          the agreement; or

ii)         the amount that has been deferred.


5)        An agreement, irrespective of its form but not including an agreement contemplated in subsection (2), constitutes a credit guarantee if, in terms of that agreement, a person undertakes or promises to satisfy upon demand any obligation of another consumer in terms of a credit facility or a credit transaction to which this Act applies.


6)        If, as contemplated in subsection (1)(d), a particular credit agreement constitutes both a credit facility as described in subsection (3) and a credit transaction in terms of subsection (4)(d)-

a)        subject to paragraph (b), that agreement is equally subject to any provision of this Act that applies specifically or exclusively to either-

i)          credit facilities; or

ii)         mortgage agreements or secured loans, as the case may be, and

b)        for the purpose of applying-

i)          section 108, that agreement must be regarded as a credit facility; or

ii)         section 4(1)(b) read with section 9(4), that agreement must be regarded as a large agreement if it is a mortgage agreement.

9. Categories of credit agreements

1)        For all purposes of this Act, every credit agreement is characterised as a small agreement, an intermediate agreement, or a large agreement, as described in subsections (2), (3) and (4) respectively.


2)        A credit agreement is a small agreement if it is-

a)        a pawn transaction;

b)        a credit facility, if the credit limit under that facility falls at or below the lower of the thresholds established in terms of section 7(1)(b); or

c)        any other credit transaction except a mortgage agreement or a credit guarantee, and the principal debt under that transaction or guarantee falls at or below the lower of the thresholds established in terms of section 7(1)(b).


3)        A credit agreement is an intermediate agreement if it is-

a)        a credit facility, if the credit limit under that facility falls above the lower of the thresholds established in terms of section 7(1)(b); or

b)        any credit transaction except a pawn transaction, a mortgage agreement or a credit guarantee, and the principal debt under that transaction or guarantee falls between the thresholds established in terms of section 7(1)(b).


4)        A credit agreement is a large agreement if it is-

a)        a mortgage agreement; or

b)        any other credit transaction except a pawn transaction or a credit guarantee, and the principal debt under that transaction or guarantee falls at or above the higher of the thresholds established in terms of section 7(1)(b).

10. Developmental credit agreements

1)        A credit agreement, irrespective of its form, type or category, is a developmental credit agreement if-

a)        at the time the agreement is entered into, the credit provider holds a supplementary registration certificate issued in terms of an application contemplated in section 41; and

b)        the credit agreement is-

i)          between a credit co-operative as credit provider, and a member of that credit co-operative as consumer, if profit is not the dominant purpose for entering into the agreement, and the principal debt under that agreement does not exceed the prescribed maximum amount;

ii)         an educational loan; or

iii)        entered into for any of the following purposes-

aa)      development of a small business;

bb)      the acquisition, rehabilitation, building or expansion of low income housing; or

cc)      any other purpose prescribed in terms of subsection (2)(a).


2)        The Minister may prescribe-

a)        additional purposes, as contemplated in subsection (1)(b)(iii)(cc), that are designed to promote the socio-economic development and welfare of persons contemplated in section 13(a);

b)        a maximum principal debt above which a credit agreement contemplated in subsection (1)(b)(i) does not automatically qualify as a developmental credit agreement; and

c)        criteria and standards to be applied by the National Credit Regulator in considering whether a credit provider’s dominant purpose for making an agreement was profit or a purpose other than profit, including but not limited to the extent to which the credit agreement concerned contributes to the socio-economic development and welfare of persons contemplated in section 13(a).

11. Public interest credit agreements

1)        The Minister-

a)        by declaration in accordance with subsection (2); or

b)        by regulation in accordance with subsection (3),

may declare that credit agreements entered into in specified circumstances, or for specified purposes, during a specific period or until the declaration or regulation is repealed, are public interest credit agreements.


2)        The Minister, by notice in the Gazette, may make a declaration contemplated in subsection (1)(a)-

a)        in order to promote the availability of credit in all or part of the Republic in circumstances of natural disaster or similar emergent and grave public interest: and

b)        with or without prior notice or consultation, as the Minister may determine having regard to the circumstances.


3)        The Minister may make a regulation contemplated in subsection (1)(b)-

a)        in order to promote the availability of credit in all or part of the Republic in any circumstances that the Minister considers to be in the public interest; and

b)        in accordance with the provisions of section 171(2).


4)        When making a declaration or regulation contemplated in subsection (1) the Minister must prescribe the following criteria applicable to determining whether a credit agreement qualifies as a public interest credit agreement:

a)        The public interest circumstances in which credit may be granted or made available to a consumer;

b)        the maximum permissible principal debt;

c)        the maximum permissible duration of the credit agreement; and

d)        the area within the Republic in which the consumer under such an agreement must reside or carry on business.


5)        A public interest credit agreement is exempt from the application of Part D of Chapter 4 to the extent that it concerns reckless credit.

Debt Counsellors

Marsia Kuypers

Tel: 082 396 2568

Fax: 086 556 3328

Area: Pretoria

Jan-Viljoen Coetzee

Tel: 084 549 1755

Fax: 086 621 9193

Area: Nina Park

Valerie Nakale

Tel: 018 381 8768

Fax: 018 381 8604

Area: Mafikeng

Dean Morris

Tel: 083 645 4094

Fax: 031 763 4363

Area: La Lucia

Joana Vivier

Tel: 053 832 6229

Fax: 086 543 4640

Area: Kimberley

Jacques Jooste

Tel: 011 794 7555

Fax: 011 794 9965

Area: Johannesburg

Marlene Stein

Tel: 012 667 4177

Fax: 086 527 2203

Area: Irene

Heidi Naude

Tel: 044 873 0281

Fax: 086 512 5012

Area: George

Herbert Theron

Tel: 011 472 0088

Fax: 086 655 6730

Area: Florida

Isabe Landman

Tel: 041 933 1189

Fax: 086 591 2676

Area: Despatch

Andiswa Tinto

Tel: 021 431 9134

Fax: 086 523 7084

Area: Cape Town

Jaco Janse Van Rensburg

Tel: 082 568 4969

Fax: 086 645 0389

Area: Barberton

Monique Snyders

Tel: 032 946 3024

Fax: 086 588 4605

Area: Ballito

Christopher Beukes

Tel: 084 2577599

Fax: 021 637 5023

Area: Athlone

Lydia Kinnear

Tel: 082 824 6338

Fax: 086 537 5976

Area: Annlin

Anlizette Schuurman

Tel: 031 903 3840

Fax: 031 701 5570

Area: Amanzimtoti

Kelebogile Mooketsi

Tel: 082 299 3430

Fax: 086 695 3280

Area: Amandasig

Annerie Marais

Tel: 083 703 0486

Fax: 045 838 6572

Area: Aliwall North

Rerandzo Mokgwatlheng

Tel: 082 430 6329

Fax: 011 805 8348

Area: Alexandra Township

Daniel Lezar

Tel: 011 907 1022

Fax: 011 907 1490

Area: Alberton