PowerPoint summaries of UCT's Business Law II (CML2010z) module based on the 2024 year of teaching. This package includes extensive summaries of Consumer Credit under the National Credit Act, Insolvency and its effects under the Insolvency Act, as well as Security and means of credit surety. It is ...
, Terminology and Concepts
Credit agreements identified by:
1. Credit is extended – creditor lends money to
debtor with an agreement of repayment in The National Credit Act 34 of 2005:
future
• Governs consumer credit in SA since
2. The is a cost to the debtor – e.g. interest, 2007 (regulations amended often)
charges, fees, etc
Aims: (continued)
Importance of regulation:
• Promote development of the credit
Crucial to protect individuals from exploitation by
powerful businesses and organisations
market
• Regulations address power imbalances • Promote responsible borrowing
• The National Credit Act 35 (NCA) enhances • Address imbalances in negotiating
consumer protection power
Reflects transformative constitutionalism – fairer
legal system in line with Constitutional values • Improve access to information
(consumers)
• Also promotes access to credit for financial
inclusion (individuals can obtain credit) • Promote better dispute resolution
• Prevents reckless lending and over-indebtedness
, Continued
‘Consumers’ under the NCA: ‘Credit Provider’ under the NCA:
Natural persons who borrow money Anyone who lends to a consumer in a
under a credit agreement credit agreement more than R1 (not
necessarily as part of business)
• All natural persons are consumers
• However, unregistered credit provide
Juristic persons – generally not cannot lawfully enforce an agreemen
consumers (only when very small) The credit agreement is unlawful (thus
void)
• Must have a net asset value and
annual turnover, both below R1m • If the credit provider is the Reserve
at the time of the loan Bank, NCA doesn’t apply
The State or an ‘organ of State’ are ‘Credit Agreement’ under the NCA:
never consumers
A loan to a consumer at arm’s length
where there is a cost of credit that will
covered
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