Team 1 Waterfront

The 1st of June 2007 is the final deadline for the implementation of the new National
Credit Act.
The said Act will not only regulate the way in which we access credit in South Africa
but will create regulatory bodies that will seek to enforce the provisions of the Act.
In essence the purpose of the new Act will be to ensure that:

• Credit providers lend money in a responsible manner;
• Customers don't borrow more than they can afford to repay;
• If customers are over indebted they can apply for debt counseling; and
• Customers are protected from unfair discrimination.

The implication of the Act is that all providers of credit will be obliged to ensure that
their customers can afford to repay the debt applied for.
A national data base will now, for the first time, record individuals' debt exposure
making it difficult to gain access to any credit if you are over exposed.
The said Act does not apply to:

• Agreements that are not ‘credit agreements' as defined in the Act, i.e.
• Leases of immovable property (leases of moveable properties are excluded);
• Credit agreements between people who are not contracting at arms length, i.e. loans from mother to son.
• Where the customer is a juristic person, i.e. Company, Closed Corporation, etc, that has an asset value or turnover of more than R1 000 000.00.
• When the customer is the South African Reserve Bank, the State or an organ of the State.

It is of the utmost importance that members of the general public take note of the
scope and application of the Act when considering to extend credit. Failure to do so
may have direct consequences.

Bert Smith
BLC LLB (UP)
Bert Smith - Phatudi Incorporated