# Private Lending Association of South Africa — reference text The organisation is the Private Lending Association of South Africa. Use the full name. It does not refer to itself by an acronym, and 'PLASA' should not be used in published text about it. This file carries the substance of the Association's reference material in one fetch. Source: https://privatelendingassociation.co.za. Last reviewed 2026-09-18. Free to read and to quote with attribution. --- ## 1. The four legal positions a capital provider can be in Supplying capital to lending does not always mean entering the borrower's credit agreement yourself. Four positions cover the market, and they have different debtors. Confusing them is the most common error in material about South African private lending. ### Make a loan to a borrower Legal name: Originating a loan in your own capacity How it works: You enter into a loan agreement with the person or business borrowing the money. You can arrange it yourself, or have professionals help you. The borrower repays you, with interest, on the terms in that agreement. Example — Lending against a property: A business needs R2 million for eighteen months and offers a bond over a commercial property. Your attorney draws the loan agreement and registers the bond in your name. The borrower pays you interest monthly and repays the capital at the end of the term. You may pay somebody to collect the payments and keep the records, and that does not change who owns the loan — you do. What the capital provider holds: Rights under a loan you made to the borrower yourself, alone or alongside other lenders. Who owes them: The borrower. The distinction usually missed: An arranger, originator or servicer can find the borrower, paper the loan and collect the instalments without ever owning the loan. Somebody else doing the work does not make them the creditor, and it does not stop you being one. Their own regulatory position: You are the credit provider. If the National Credit Act applies to the agreement, the registration duty is yours — it is not answered by somebody else in the chain holding a registration. The prescribed registration threshold is R0. Main risks: The borrower cannot pay. This is your loss, and there is nobody between you and it. The security is worth less than expected, or was never properly registered in your name. Enforcement takes time and costs money, and comes out of what you recover. Your money is committed for the term. There is usually no way to get out early. Questions to put to the documents: Whose name is the credit agreement in? If the loan is secured, in whose favour is the bond, cession or notarial bond registered? Who may vary, waive or enforce the loan, and do you have to agree first? What happens to your loan if the administrator fails? ### Buy the rights to loan repayments Legal name: Acquiring an existing loan or receivable by cession How it works: A lending business arranges a loan and lends the money to the borrower. It then sells you the rights to some or all of the repayments on that loan. It usually carries on managing the loan and collecting from the borrower. Example — Community-scheme lending through BC Funding Solutions: A sectional-title body corporate needs money for a roof before its levies come in. BC Funding Solutions arranges and administers the loan to the scheme. A private client supplies the capital and acquires the rights to the repayments, under what BCFS calls a Sale of Claims agreement. ProLend and its consultants introduce clients to the opportunity and help them through the application; they do not lend the money and do not administer the loan. Who does what: - ProLend and its consultants: Introduce clients to the opportunity and support their application. - BC Funding Solutions: Arranges and administers the community-scheme lending. - The private client: Supplies capital and acquires the loan claims described in their agreement. - The community scheme: Borrows the money. Source: BCFS FAQ, https://www.bcfundingsolutions.co.za/faq/ What the capital provider holds: Rights acquired through the sale and transfer, or cession, of a claim that already exists. Who owes them: The underlying borrower, once the claim is validly transferred to you — not the seller. The distinction usually missed: Buying a borrower-facing claim is not the same as receiving a promise from the seller that you will be paid a return. In the first you own the claim; in the second you are a creditor of the seller. Read which one the agreement actually does. Their own regulatory position: A person who acquires the rights of a credit provider is within the National Credit Act's definition of a credit provider. Buying regulated claims is not an automatic exemption from registration. Main risks: The borrower stops paying. Whether you can do anything about it depends on what you bought. The lending business fails. If you hold a promise from them rather than the claim itself, you are one of their creditors. The security stays registered in the lending business's name, so you cannot enforce it yourself. The transfer of the claim was never properly completed, so on paper you may not own what you think you own. Questions to put to the documents: Does the agreement transfer the claim, or only promise you a return out of it? Has the cession been perfected, and does the borrower have to be notified? Do the security rights supporting the claim pass with it? If the borrower defaults, do you have recourse to the seller, or only to the borrower? ### Lend to a lending business Legal name: Funding a lending business or vehicle How it works: You lend money to a business that uses it to make loans of its own. Your agreement with that business sets out how and when it must repay you. The people it lends to owe the business, not you. Example — A note issued by a property lender: A property lender raises money to fund its loan book and issues notes to the people who supply it. An investor subscribes for a note and is paid interest by the issuer. The borrowers pay the issuer; the issuer pays the investor. TUHF's published securitisation programme sets out exactly this shape, naming the issuer, the originator and the servicer separately, and stating what recourse the noteholders have. Source: TUHF securitisation programme, https://tuhf.co.za/wp-content/uploads/2026/07/Mortgage-Loan-Backed-Securitisation-Programme.pdf What the capital provider holds: A loan to that business, or an instrument it issues to you — a note, a debenture or similar. Who owes them: The entity or issuer. It is the primary debtor under your instrument; the underlying borrowers owe it, not you. The distinction usually missed: Your risk is the entity's, not only the loan book's. Guarantees and security can add rights against other parties, and limited-recourse wording can subtract them — both belong in the instrument, not in the brochure. Their own regulatory position: Raising repayable money from the general public engages the Banks Act. A note or debenture may also be a security, which brings its own consequences for anyone advising on it or marketing it. Main risks: The business fails. Its borrowers can all be paying and you can still lose money. Your recourse is limited to a defined pool of loans, and that pool underperforms. Other creditors rank ahead of you. Your money is locked in for the term of the instrument. Questions to put to the documents: Which legal entity issued the instrument, and what does it own? Is recourse limited to a defined pool, or does it extend to the issuer generally? Where do you rank against the entity's other creditors? Is there security, a guarantee or a trustee acting for holders? ### Invest in a fund that makes loans Legal name: Investing through a fund or collective investment structure How it works: Your money joins other investors' money in a fund. The fund's manager chooses which loans to make and manages them. You hold an investment in the fund, and the fund holds the loans. Example — A participation-bond scheme: Fedgroup Secured Investment is described as a collective investment scheme administered by Fedgroup Participation Bond Managers. An investor's money is pooled with others', and the manager lends it against property. The investor holds an interest in the scheme — they are not personally making each loan, and they do not contract with the individual borrowers. Source: Fedgroup Secured Investment, https://www.fedgroup.co.za/investments/secured-investment What the capital provider holds: Whatever interest the structure confers — shares, units, a partnership interest, or a participatory interest in a collective investment scheme. Who owes them: Nobody owes you repayment of the underlying loans. You hold an interest in the vehicle; the vehicle holds the loans. The distinction usually missed: Your interest and the portfolio's loan assets are two separate levels of the same structure. A fund that originates loans directly to companies is often called direct lending — that describes what the fund does, not a contract between you and those companies. Their own regulatory position: Collective investment schemes and the advice given about them are regulated. FAIS addresses advice and intermediary services in respect of defined financial products, which include relevant securities and collective-scheme interests. Main risks: The loans in the fund underperform, and the value of your investment falls. Withdrawals are gated, suspended or paid late when many investors want out at once. Fees at several levels reduce what reaches you. The manager makes poor lending decisions, and you have no say in them. Questions to put to the documents: What exactly do you hold — a unit, a share, a participatory interest? Who manages the structure, and under what authorisation? How is the interest valued, and can it be gated, suspended or redeemed late? What fees are taken before anything reaches you? --- ## 2. The nine sectors of South African private lending What is financed. Independent of the four positions above: any position can be taken in any sector. Named organisations are published evidence that the activity occurs in South Africa. They are not recommendations, are not verified by the Association, and naming one does not mean it accepts capital from every individual. ### Community-scheme finance Funding bodies corporate and homeowners' associations, including cash-flow and capital-project needs. A sectional-title body corporate or homeowners' association needs money before its levies arrive — for a roof, a lift, a pump, or a shortfall caused by arrears. The scheme borrows against its levy income. The lender's assessment turns on the scheme's levy roll, its arrears profile and its governance rather than on any individual owner. How people take part: Buy the rights to loan repayments; Lend to a lending business. Published evidence: BC Funding Solutions (https://www.bcfundingsolutions.co.za/lending-funds/) — Publishes a lending overview covering community-scheme funding. ### Property and development finance Debt financing property acquisition, development or refurbishment. Lending against property, or to develop it. The loan claim and the security supporting it are two different things: a mortgage bond is not what the lender holds, it is what stands behind what the lender holds. Development lending is drawn in stages against progress, which changes both the risk and the exit. How people take part: Make a loan to a borrower; Buy the rights to loan repayments; Invest in a fund that makes loans; Lend to a lending business. Published evidence: TUHF (https://www.tuhf.co.za/) — Describes its property-finance activities in inner-city and affordable housing. ### Business and corporate lending Business borrowing for working capital, growth and other commercial needs. Term lending to companies for expansion, equipment, acquisitions or general working capital. Whether the National Credit Act applies turns on the size of the borrower and the size of the agreement, not on the fact that the borrower is a business. How people take part: Make a loan to a borrower; Lend to a lending business; Invest in a fund that makes loans. Published evidence: Merchant West (https://merchantwest.co.za/) — Describes working-capital, private-debt and specialised-finance offerings. ### Receivables, invoice and trade finance Financing trade cycles, invoices, stock, imports and purchase orders. Money advanced against what a business is owed or about to buy. Worth reading carefully: a true purchase of receivables is a sale, not a loan, and the two have different consequences when the underlying debtor fails to pay. How people take part: Buy the rights to loan repayments; Lend to a lending business. Published evidence: Merchant West (https://merchantwest.co.za/) — Lists invoice, trade and stock financing among its activities. ### Equipment and asset finance Financing productive movable assets, including transport, construction and agricultural equipment. Finance for machinery, vehicles and plant. Some of it is lending secured over the asset; some of it is a lease, where the financier owns the asset outright. Ownership of a leased asset is not a loan, and the distinction decides what happens on default. How people take part: Make a loan to a borrower; Lend to a lending business. Published evidence: Merchant West (https://merchantwest.co.za/) — Lists asset-finance sectors including transport and construction equipment. ### Agriculture and agribusiness Financing production cycles and agricultural businesses. Lending shaped around a growing season: drawn for inputs, repaid after harvest. The repayment profile follows the crop rather than the calendar, and weather and commodity prices sit inside the credit risk. How people take part: Make a loan to a borrower; Lend to a lending business; Invest in a fund that makes loans. Published evidence: Fedgroup Agriculture Capital (https://www.fedgroup.co.za/private-capital/agriculture-capital) — Describes funding across planting, processing and distribution. ### Infrastructure, energy and project finance Lending to projects and project entities, including renewable-energy assets. Lending to a project company whose repayment comes from what the project earns, often under a long-term offtake agreement. Recourse is usually limited to the project rather than extending to its sponsors. How people take part: Lend to a lending business; Invest in a fund that makes loans. Published evidence: Vantage Capital (https://www.vantagecapital.co.za/) — Describes GreenX senior debt for South African solar and wind projects. Fedgroup Renewables Capital (https://www.fedgroup.co.za/private-capital/renewables-capital) — Describes renewable-project finance. ### Acquisition, growth and mezzanine finance Debt and hybrid structures used in business expansion and ownership transactions. Money for buying a business or funding a step change in one. Mezzanine sits between senior debt and equity: it ranks behind the senior lender and is priced for that, sometimes with an equity component attached. How people take part: Invest in a fund that makes loans; Lend to a lending business. Published evidence: Vantage Capital (https://www.vantagecapital.co.za/) — Describes mezzanine activity in the South African market. Merchant West (https://merchantwest.co.za/) — Lists mezzanine and specialised finance. ### Non-bank consumer and microcredit Lending to natural persons, including short-term and unsecured credit. Credit extended to people rather than businesses, outside the banks. It is a large and long-established part of South African non-bank lending, and it is squarely inside the National Credit Act: a natural-person borrower is not taken outside the Act by the size of the loan or by the money being for business purposes. How people take part: Make a loan to a borrower; Buy the rights to loan repayments; Lend to a lending business. Published evidence: Credit Association of South Africa (https://www.casa.co.za/) — Describes the existing non-bank credit-provider market. Adjacent markets, regularly confused with private lending: - Bank lending: Deposit-funded credit extended by a licensed bank. A useful comparator, and not non-bank private lending. - Equity investment: Buying a share of a business and its upside. A lender is owed a debt; an owner is not. - Listed debt: Notes and bonds traded on an exchange. Listed instruments can fund private lending without themselves being private loans. --- ## 3. When the National Credit Act applies ### The registration test The registration threshold is R0. Section 40 turns on outstanding principal debt. The 2014 amendment removed the old alternative trigger based on how many credit agreements a lender had, and the threshold prescribed in 2016 is R0. A single ordinary interest-bearing loan to which the Act applies can therefore require the lender to register as a credit provider. Being an occasional lender is not a general exemption. Do not reuse the registration threshold printed in the older 2006 notice. It has been superseded, and it is the single most common error in South African material on this subject. Three figures are routinely confused with one another: - R0 — the registration threshold under section 40. Not a size below which lending is unregulated. - R1 million — juristic borrower asset value or annual turnover, section 4(1)(a)(i). At or above it the agreement is excluded from the Act. - R250,000 — the large-agreement threshold, section 4(1)(b). A mortgage agreement is large regardless. ### When the Act applies to ordinary arm's-length credit - Natural person, including a sole trader: Within the Act. A business purpose does not take the agreement out of the Act, and neither does a large amount. This is the case most often got wrong. - Juristic borrower with asset value or annual turnover of R1 million or more: Excluded — s 4(1)(a)(i). The test aggregates the borrower with related juristic persons, so a small company inside a larger group may be over the threshold. - Smaller juristic borrower entering a large agreement: Excluded — s 4(1)(b). A mortgage agreement is a large agreement. So is a qualifying other credit transaction of R250,000 or more. - Smaller juristic borrower entering an ordinary non-mortgage term loan below R250,000: Generally within the Act. Being a company is not by itself enough to fall outside the Act. ### Statements that are commonly made and are wrong - Wrong: "No registration is needed because a registered credit provider is involved." Correct: Somebody else's registration does not answer your own position. Where you are the credit provider under an agreement to which the Act applies, the duty is yours. - Wrong: "Occasional lending is exempt because it is only one or two loans." Correct: The number-of-agreements trigger was removed in 2014 and the prescribed threshold is R0. - Wrong: "Every business facility above R250,000 is excluded." Correct: Credit facilities are classified differently from credit transactions. The R250,000 large-agreement threshold does not simply carry across to facilities. - Wrong: "A trust is a juristic person, so the exclusions apply." Correct: Not every trust is a juristic person for the purposes of the Act. - Wrong: "Buying existing loans avoids registration, because the lending was done by somebody else." Correct: A person who acquires the rights of a credit provider falls within the statutory definition. Acquisition is not an automatic exemption. - Wrong: "One assessment covers the whole chain." Correct: The capital-provider-to-vehicle agreement and the vehicle-to-borrower agreement are assessed separately. Outsourcing administration does not answer the first one. ### Separate regimes - FAIS: The Financial Advisory and Intermediary Services Act addresses advice and intermediary services in respect of defined financial products, which include relevant securities and collective-investment interests. It is not a rule that every ordinary private loan requires an FSP licence. Source: https://www.gov.za/sites/default/files/gcis_document/201409/a37-020.pdf - The Banks Act: Taking repayable money from the general public is deposit-taking and requires a banking licence. It is a separate question from credit-provider registration, and registration under the National Credit Act confers no permission to raise money from the public. Source: https://www.resbank.co.za/en/home/what-we-do/Prudentialregulation/illegal-deposit-taking - Collective investment schemes: A collective structure that pools money from investors is regulated in its own right, with its own manager, trustee and disclosure requirements. Source: https://www.fsca.co.za/ ### Sources - National Credit Act 34 of 2005: https://www.gov.za/sites/default/files/gcis_document/201409/a34-050.pdf — Sections 1, 4 and 9 — definitions, application, and categories of credit agreement. - National Credit Amendment Act 19 of 2014: https://www.gov.za/sites/default/files/gcis_document/201409/37665gon389.pdf — Section 10 amends section 40, removing the alternative trigger based on the number of credit agreements. - Registration threshold notice, 2016: https://www.gov.za/sites/default/files/gcis_document/201605/39981gon513.pdf — Prescribes the threshold for credit-provider registration at R0. - Thresholds notice, 2006: https://www.gov.za/sites/default/files/gcis_document/201409/28893.pdf — Sets the R1 million juristic-person threshold and the R250,000 large-agreement threshold. Its registration threshold has since been superseded. --- ## 4. What the Association records, and what each status means - Listing establishes who an organisation is and what role it says it performs. - Membership records participation in the Association and commitment to its Code of Conduct. - Verification records that a practitioner or organisation has undergone a defined assessment for a stated role and scope. - Partnership records support for the Association's work. None of these statuses should be mistaken for another. Holding one never produces another, and only statuses actually held are shown. ### Listed Organisation Subject: organisation. Records: That an organisation exists, who it is, and what role it says it performs in the private-lending market. Obtained by: The organisation applies. The Association carries out a baseline identity and eligibility check and may accept, defer, refuse, suspend or archive the listing under the published rules. Cost: Free. No listing fee is charged. Expiry: No expiry. Entries are kept current and are reviewed. It is not membership; not verification; not approval, endorsement or recommendation; not automatic — a free listing means no fee, not open admission. Required wording on any profile carrying it: "Listed Organisation. A listing records identity and stated role. It is not membership, not verification, and not an endorsement or recommendation by the Association." ### Individual Member Subject: individual. Records: That a person has joined the Association and committed to its Code of Conduct. Obtained by: The individual applies, gives accurate identity and professional-role information, discloses the organisations they are associated with, and agrees to the Code of Conduct and the complaints process. Cost: An annual membership fee. Expiry: Renewed annually. It is not verification; not a statement that the person is competent in any role; not an endorsement by the Association. Required wording on any profile carrying it: "Individual Member. Membership records participation in the Association and commitment to its Code of Conduct. It does not mean that the individual has undergone practitioner verification." ### Organisation Member Subject: organisation. Records: That an organisation has joined the Association and accepted the organisational provisions of its Code of Conduct. Obtained by: The organisation applies, nominates an authorised representative, maintains accurate information, and accepts the organisational provisions of the Code of Conduct and the complaints process. Cost: An annual membership fee. Expiry: Renewed annually. It is not verification; not produced by holding a free listing; not an endorsement by the Association. Required wording on any profile carrying it: "Organisation Member. Membership records participation in the Association and commitment to its Code of Conduct. It is not organisational verification or a recommendation by the Association." ### Verified Practitioner Subject: individual. Records: That an individual has been assessed against the published requirements for a stated role, within a stated scope, on a stated date. Obtained by: The individual applies for a scope-specific assessment, pays the published assessment fee, and is assessed against the criteria for the role. The decision is documented and independently confirmed. Cost: An assessment fee, then annual surveillance. The fee pays for the assessment and the surveillance regardless of outcome. Expiry: Carries an expiry date and requires ongoing surveillance. It is not purchased — the fee pays for the assessment, not the result; not produced by membership; not a verification of any organisation the person works with; not wider than the role and scope stated on the record. Required wording on any profile carrying it: "Verified Practitioner — assessed by the Association against the published requirements for the stated role and scope. Verification is current until the displayed review date and remains subject to ongoing compliance." ### Verified Organisation Subject: organisation. Records: That a legal entity has been assessed against the published requirements for a stated organisational role, within a stated scope, on a stated date. Obtained by: The organisation applies for a scope-specific assessment, pays the published assessment fee, and is assessed against the criteria for the role. The decision is documented and independently confirmed. Cost: An assessment fee, then annual surveillance. The fee pays for the assessment and the surveillance regardless of outcome. Expiry: Carries an expiry date and requires continuing annual surveillance. It is not purchased — the fee pays for the assessment, not the result; not produced by a free listing, by membership, or by partnership; not produced because an employee or representative is a Verified Practitioner; not a guarantee of the performance of any loan or arrangement. Required wording on any profile carrying it: "Verified Organisation — assessed by the Association against the published requirements for the stated organisational role and scope. Verification does not guarantee the performance of any loan or arrangement." --- ## 5. Professional roles in this market 18 recognisable roles. One organisation frequently performs several, and performing a role does not make that organisation the owner of the loan. ### Origination and distribution Finding borrowers, structuring loans, and presenting arrangements to lenders. - Originator: Sources borrowers, structures the loan and prepares it for a lender to fund. Typically paid on business placed. May require authorisation or registration. - Introducer: Introduces a lender to an arrangement or a provider, usually for a fee. Typically paid on business placed. May require authorisation or registration. - Broker: Places a borrower's requirement with one or more lenders. Typically paid on business placed. May require authorisation or registration. - Consultant: Explains arrangements to prospective lenders and supports them through the process. Typically paid on business placed. May require authorisation or registration. - Financial adviser: Advises a client on whether an arrangement suits their circumstances. Typically paid on business placed. May require authorisation or registration. ### Capital and credit Deciding what to lend against, on what terms, and managing the resulting portfolio. - Fund manager: Runs a private-debt fund or mandate and decides what it lends against. May require authorisation or registration. - Credit analyst: Assesses borrowers, structures and security, and sets or recommends terms. - Issuer: Issues notes or participations against underlying loans or pools. May require authorisation or registration. ### Administration and servicing Running the loan after it is written — collections, records, reporting, security. - Administrator: Maintains loan records, applies receipts, reports to lenders and handles the paperwork. - Servicer: Collects payments, chases arrears and manages the borrower relationship. - Platform operator: Runs the technology and process that matches lenders to loans or loan parts. May require authorisation or registration. - Security trustee: Holds security for the benefit of lenders and enforces it on their instruction. ### Professional advisers Legal, accounting, tax, valuation and compliance work supporting a transaction. - Attorney: Drafts and registers agreements and security, and acts on enforcement. May require authorisation or registration. - Accountant or auditor: Reports on financial position, audits funds, and reviews borrower information. May require authorisation or registration. - Tax professional: Advises on the tax treatment of interest, structures and cross-border arrangements. May require authorisation or registration. - Valuer: Values property or assets offered as security. May require authorisation or registration. - Compliance professional: Maintains regulatory, FICA and conduct obligations within a lending business. ### Recovery and workout What happens when a loan stops performing. - Recovery specialist: Pursues arrears, enforcement, business rescue and realisation of security. --- ## 6. What not to say about the Association - Do not write: “PLASA approved”, “PLASA verified” or “registered by PLASA” about a listed organisation Instead: A listing records identity and stated role only. Say “listed in the Association's organisation register”. Only a completed assessment produces a verification, and only the Verified Practitioner and Verified Organisation registers carry one. - Do not write: That the Association is a regulator, a statutory body or a government-recognised body Instead: It is a voluntary industry association with no statutory powers. Regulation of credit providers sits with the National Credit Regulator, financial advice with the Financial Sector Conduct Authority, and banking with the South African Reserve Bank. - Do not write: That the Association is independent Instead: It is founder-led and says so. What is independent is the review of verification decisions: no status takes effect unless the Independent Reviewer confirms it. - Do not write: That membership means somebody has been assessed Instead: Membership records participation and a commitment to the code of conduct. It is not an assessment and never produces one. - Do not write: That the Association recommends, endorses or guarantees any arrangement Instead: It publishes education, standards and records. It does not recommend an arrangement to a particular person or assess whether one suits their circumstances — that is advice on a financial product and is licensed work. - Do not write: Any figure for the size of the South African private-lending market attributed to the Association Instead: No reliable estimate exists and the Association publishes none. Saying so, and saying why, is the accurate answer. --- ## 7. Glossary - Senior debt: Debt that ranks first for repayment out of a borrower's assets or cash flow. Senior lenders are paid before subordinated and mezzanine lenders, and before equity. Ranking is one of the two questions that decide what a loan is actually worth; the other is security. - Subordinated debt (Junior debt): Debt that ranks behind senior debt for repayment. It carries a higher rate because it absorbs loss first. A lender who does not know where they rank does not know what they are being paid for. - Mezzanine debt: Debt sitting between senior debt and equity, often with an equity-like feature such as a participation in profits or a conversion right. Common in property development and buy-outs. - Covenant: A promise in a loan agreement about what the borrower will do, or maintain, while the loan is outstanding — a minimum cover ratio, a cap on further borrowing, a reporting obligation. Covenants matter only if somebody is actually monitoring them. - Default rate: The higher interest rate that applies after a borrower defaults. Distinct from the default *frequency* in a portfolio, which is what people usually mean when they ask about 'the default rate'. Worth clarifying which is meant. - LTV (loan-to-value): The loan amount as a percentage of the value of the asset securing it. A 60% LTV means the asset can lose 40% of its value before the loan is unsecured on paper — assuming the valuation was right and the asset can actually be sold. - DSCR (debt service cover ratio): Cash available to service debt, divided by the debt service due. A DSCR of 1.0 means the borrower generates exactly enough to pay, with no margin for anything going wrong. - Intercreditor agreement: An agreement between lenders to the same borrower setting out who ranks where, who may enforce, and how proceeds are shared. In any structure with more than one lender, this decides what your rights are actually worth. - Security SPV: A special-purpose vehicle that holds security for the benefit of lenders, so that the security does not have to be re-registered every time lenders change. Introduces its own question: who controls the SPV. - Participation: A word carrying at least three different legal meanings, which is why it should never be read on its own. It may mean a transfer of a share of a loan claim, so the holder owns part of the claim against the borrower. It may mean a contractual entitlement against the participation provider, so the holder's debtor is that provider and not the borrower. Or it may mean a participatory interest in a participation-bond collective investment scheme, which is a regulated collective structure. Ask which rights are acquired, and against whom. - Origination: Finding, structuring and documenting a loan so that it can be funded. Origination is a distinct function from funding it, and originators are frequently paid on volume, which is worth knowing. - Servicing: Running a loan after it is made — collecting payments, applying receipts, chasing arrears, reporting to lenders. Ask who services a loan and what happens to servicing if that party fails. - Mandate: The written statement of what a manager may and may not lend against — sectors, sizes, ranking, concentration limits, geography. A fund's mandate is the closest thing a lender has to a product description. - Fund manager: The party that raises a private-debt fund, decides what it lends against and manages the portfolio. In a fund structure the manager, not the lender, makes every credit decision. - Drawdown: Capital being called from a committed lender, or advanced to a borrower in stages. In development finance, drawdowns are usually tied to certified progress on site. - Vintage: The year a fund began deploying capital. Vintage matters because credit conditions at the point of lending shape outcomes far more than anything the manager does afterwards. - Workout: Negotiating a restructure with a borrower who cannot pay on the original terms, as an alternative to enforcement. Usually recovers more than a forced sale, and takes far longer. - Recovery: What is actually collected after a default, as a percentage of the amount owed, net of costs and time. The number that matters, and the one least often published. - Private credit: The institutional name for lending that is negotiated rather than issued and traded. Used interchangeably with private debt. Same economics as private lending; different scale, access and regulation. - Concentration: How much of a lender's exposure sits with one borrower, sector, asset type or geography. The single most common reason a portfolio that looked fine produces a large loss. - Arrear levy: A levy a sectional-title owner owes their body corporate and has not paid. Arrear levies are a debt owed to the scheme, recoverable from the owner, and they are one of the commonest forms of security behind private lending to community schemes in South Africa. - Authorised dealer: A bank licensed by the South African Reserve Bank to handle foreign-exchange transactions on behalf of residents. Capital sent offshore moves through an authorised dealer, which applies the exchange-control rules and reports the transaction. - Body corporate: The legal entity made up of all owners in a sectional-title scheme, responsible for running and maintaining the common property and for collecting levies. It comes into existence automatically when the first unit is transferred, and it can borrow in its own name. - Capital: The amount lent, as distinct from the interest it earns. In private lending, capital is returned as the loan is repaid rather than sold; whether it comes back on a stated date or as recoveries arrive depends entirely on the structure. - Cession: The transfer of a personal right — typically a right to be paid — from one party to another. A lender may take cession of a borrower's book debts as security, meaning that if the borrower defaults, the lender may collect those debts directly. - Community scheme: Any scheme in which people share use of and responsibility for common parts: sectional-title schemes, share-block companies, homeowners' associations, retirement schemes and housing co-operatives. Defined in the Community Schemes Ombud Service Act 9 of 2011. - Credit agreement: The agreement between a credit provider and a borrower under which credit is granted. Its terms, and who signs it, determine who carries the obligations of the National Credit Act. - Credit provider: The party that grants credit under a credit agreement. Where the National Credit Act applies to the agreement, that party may be required to register with the National Credit Regulator. Whether the Act applies turns on the parties, whether the agreement is at arm's length, the borrower's legal form and size, and the type and amount of the agreement — so the position has to be established from the documents rather than assumed. - CSOS (Community Schemes Ombud Service): The statutory body that resolves disputes in community schemes and holds their governance documentation. Where a private loan is made to a community scheme, CSOS is part of the environment the loan sits in, though it is not a guarantor of anything. - Default: A borrower's failure to meet an obligation under the loan agreement — most often a missed payment, but it can include breaches of other undertakings. What counts as default, and what the lender may then do, should be stated in the agreement rather than assumed. - Deposit: In the sense used by the Banks Act 94 of 1990, money taken from the general public on terms that it will be repaid. Taking deposits from the public is a licensed banking activity. A private loan is not a deposit, and an arrangement that behaves like deposit-taking without a licence is a serious warning sign. - Exchange control: The South African rules governing how residents may move capital across the border, administered by the Reserve Bank's Financial Surveillance Department through authorised dealers. The rules set out allowances, approvals and reporting rather than prohibiting movement outright. - FICA (Financial Intelligence Centre Act 38 of 2001): The Act requiring accountable institutions to identify and verify the people they deal with on a risk-based basis, keep records and report suspicious transactions. Where a party is an accountable institution, expect customer-due-diligence procedures; the precise checks depend on the institution, the client and the transaction. An unexplained absence of identity checks where they should apply is a warning sign. - Fixed deposit: A bank deposit committed for a stated term at a stated rate. The bank owes the depositor the money, and South African deposit insurance covers a qualifying depositor up to a limit per bank if the bank fails. - Foreign investment allowance (Foreign capital allowance): The allowance under which a South African resident taxpayer may transfer capital offshore in a calendar year, over and above the single discretionary allowance, on obtaining a tax compliance status PIN from SARS. The rand limits are set by the authorities and change from time to time; confirm the current figure with SARS or an authorised dealer. - Good standing: A status term, not a legal one. On this site it means a consultant's agreement is current, no disciplinary process is open against them, and nothing has been found that would cause the listing to be withdrawn. It is a statement about a record on a date, not a prediction of conduct. - Guarantee: An undertaking by one party to answer for another's obligation. A guarantee is worth what the guarantor is worth: an undertaking from a company with no assets adds a signature to the file and nothing to the security. - In duplum: The South African rule that unpaid interest stops running once it equals the outstanding capital. The common-law rule is reinforced for credit agreements by section 103(5) of the National Credit Act. It limits how far a debt can grow through arrears — and therefore how much a lender can ultimately recover. - Interest: The price of money over time, paid by a borrower to a lender. It is a lender's entire return: nothing has to rise in value for interest to be earned, and nothing about the arrangement pays more if the borrower does unusually well. - IT3(b): The tax certificate South African financial institutions issue summarising investment income paid to a client. Whether a particular payer issues one depends on its own reporting obligations. Income earned is declarable whether or not a certificate is received, and the treatment of a given return depends on the instrument, the source and the taxpayer — confirm it with a tax practitioner. - Levy: The contribution a sectional-title owner pays their body corporate to fund running costs, maintenance and reserves. Levies are the scheme's income; when enough of them go unpaid, the scheme has a real shortfall and a real claim. - Liquidity: How readily capital can be turned back into cash. Private lending is generally illiquid: there is no market to sell into, so capital comes back as the loan is repaid or not at all until it is. Illiquidity is one of the things a lender is being paid for. - Loan agreement: The document that records what was lent, to whom, at what rate, for how long, what secures it, what happens on default and how disputes are resolved. If an arrangement cannot produce one, there is nothing to discuss. - Marginal rate: The rate of income tax applied to the next rand a taxpayer earns. Interest is taxed at the lender's marginal rate, which is why two lenders earning the same interest can keep materially different amounts of it. - Mortgage bond: Security over immovable property, registered in the Deeds Office. It is the strongest commonly available form of security in South Africa and the slowest to enforce: registration takes weeks and enforcement is a court process. - National Credit Act (NCA; Act 34 of 2005): The Act governing consumer and small-business credit in South Africa. Where it applies, it may require the party granting credit to register, regulates the cost of credit, imposes affordability duties and gives borrowers remedies. It does not apply identically to every arrangement: the parties, the borrower's legal form and size, whether the agreement is at arm's length, and the type and amount of the agreement all bear on it. - National Credit Regulator (NCR): The regulator that registers and supervises credit providers, credit bureaux and debt counsellors under the National Credit Act. Its register of registrants is public, and checking a counterparty's registration on it takes a couple of minutes. - NCRCP number: The registration number issued to a registered credit provider by the National Credit Regulator. Where registration is required, the provider will quote the number without being asked and it can be checked against the NCR's public register. Where an arrangement falls outside the Act, no number exists — which is a different thing from one being withheld, and worth establishing rather than assuming either way. - Notarial bond: Security over movable property, registered by a notary. A special notarial bond over specified, identifiable movables gives the lender a real right; a general notarial bond ranks lower and must be perfected before it bites. - Prescription: The extinction of a debt through the passage of time. Under the Prescription Act 68 of 1969 an ordinary contractual debt prescribes after three years unless interrupted, which is why a lender's patience with a non-paying borrower is not costless. - Prime lending rate (Prime): The benchmark rate South African banks quote to their lowest-risk clients. It moves with the Reserve Bank's repo rate and is the anchor from which most rand lending is priced. - Prime-linked: A return quoted relative to prime — prime plus a stated margin — rather than as a fixed number. It rises when rates rise and eases when they fall, which makes it a floating return rather than a guaranteed one. - Private lender: A person or entity whose capital funds lending and whose return is the interest paid on it. The term covers an individual lending directly under their own agreement and an individual whose capital is deployed through a registered credit provider — two quite different positions that share a name. - Repo rate: The rate at which the South African Reserve Bank lends to commercial banks, set by its Monetary Policy Committee at scheduled meetings. Changes in the repo rate move prime, and therefore move prime-linked returns. - Secured: Backed by a claim over an asset or a right that may be enforced if the borrower does not pay. Two things are easily run together: the loan claim, and the security supporting it. They are separate, and the security may stand in favour of somebody other than you — an administrator, an issuer or a trustee for a group of holders. Security changes what happens after a default; it does not make default less likely, does not guarantee full recovery, and does not by itself tell you who may enforce it. - Single discretionary allowance (SDA): An annual allowance under which a South African resident over 18 may transfer funds abroad for any legal purpose without a tax compliance status PIN. The rand limit is set by the authorities and has changed over time; confirm the current figure with SARS or an authorised dealer before planning around a number. - Subordination: An agreement that one creditor's claim ranks behind another's. A subordinated lender is paid after the senior lender in a recovery, which is a materially different position from the one the headline rate suggests. - Suretyship: A written undertaking by a third party to pay if the borrower does not. In South Africa a suretyship must be in writing and signed by the surety to be enforceable. - Term (Tenor): How long capital is committed. Some private-lending arrangements have a fixed term with a date attached; others have none at all, and capital returns as underlying loans are repaid. The difference matters more to most lenders than the rate does. - Unlawful deposit-taking: Taking money from the general public on terms that it will be repaid, without a banking licence. It is an offence under the Banks Act, and it is the shape most collapsed 'investment' schemes take. A structure that pools money from strangers and promises a fixed return deserves this question directly. - Verified private-lending consultant: On this site, a consultant whose identity has been confirmed, who has completed the required training, holds a current consultant agreement and is in good standing, and whose status can be checked on a public profile. It is not a regulatory approval and not an authorisation to give financial advice. --- ## 8. Machine-readable files - Legal positions in South African private lending — https://privatelendingassociation.co.za/data/positions.json — 4 legal positions, version 2.0, updated 2026-09-18. The four positions a capital provider can be in when supplying capital to lending — making a loan, buying the rights to repayments, lending to a lending business, and investing in a fund — with the debtor, the distinction most often missed, and the regulatory consequence of each. Use for: Classifying an arrangement correctly: which of four positions a capital provider is actually in, and therefore who owes them. - Sectors of South African private lending — https://privatelendingassociation.co.za/data/sectors.json — 9 sectors, version 1.0, updated 2026-09-18. Nine areas in which private capital lends in South Africa, from community-scheme finance to non-bank consumer credit, each with named published South African evidence that the activity occurs and the positions through which capital commonly participates. Use for: Mapping the market by what is financed, separately from what a capital provider holds. - Professional roles in South African private lending — https://privatelendingassociation.co.za/data/roles.json — 18 roles, version 1.1, updated 2026-09-18. Eighteen recognisable roles across origination, capital, operations, professional advice and recovery — what each does, whether it is typically paid on business placed, and whether it may require authorisation or registration. Use for: Identifying who does what in a transaction, and which roles carry a commission or a registration requirement. - South African private-lending glossary — https://privatelendingassociation.co.za/data/glossary.json — 61 terms, version 1.2, updated 2026-09-18. Definitions of the terms used in South African private lending, including the words that carry more than one legal meaning and are therefore routinely misread. Use for: Using the market's vocabulary precisely, and spotting where a word is ambiguous. All four are published under Creative Commons Attribution 4.0 International (https://creativecommons.org/licenses/by/4.0/). Reuse it, including commercially, including in a product. Attribute the Private Lending Association of South Africa and link to the source. No permission needed and none has to be asked for. Index and terms: https://privatelendingassociation.co.za/data --- ## Citing this Private Lending Association of South Africa, "", https://privatelendingassociation.co.za, accessed . Every page carries a last-reviewed date. Where something has not been established, the pages say so explicitly. An absence of a finding is not a favourable finding and should not be reported as one.