National Credit Act

[I Robot]

Another article on M&G here on the need to register by tomorrow. Whilst the main thrust is about getting registered, it also sheds more light on the criteria that determine whether you need to register or not.

"The implications of not registering when you should have registered are severe," charged Motshegare. She also cautioned that credit agreements signed by unregistered credit providers will be declared "unlawful and unenforceable" as from June 1 2007.

According to Motshegare, the main criteria for the registration of credit providers are: a credit provider must have signed at least 100 credit agreements or have a loan book of at least R500 000.

She explained that whilst the Credit Agreements Act, Usury Act and Usury Exemption Notice had been repealed by the National Credit Act (NCA), the provisions of the repealed Acts remained enforceable until the relevant provisions in the NCA are implemented.

Motshegare also expounded that entities that provide incidental credit do not have to register with the NCR.

"This means entities such as doctors, dentists or anyone who provides goods or services on account, with the possibility for the client to pay at the end of the month 'without charging interest'," she explained.

Significantly, Motshegare points out that it should be noted that financial products such as student loans, staff loans and a facility for the consumer to pay on account over time, with interest, and other credit providers need to register. -- I-Net Bridge

All articles I have read so far seems to miss one aspect - if you offer a COD discount, this could be interpreted as a credit agreement.

So in order to avoid having to report every credit transaction with a private individual or business with an annual turnover (or assets) less than one million Rand, you may not charge interest (or any other charge) on overdue accounts or offer a COD discount!

And yes - you have to report every credit transaction that falls under the Act whether you are required to register as a credit provider or not.