Understand
When the law applies
The National Credit Act, what registration actually turns on, and the regimes that sit beside it. Written so you can ask the right question of somebody qualified to answer it.
The single most important correction
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.
01 — The registration testWhat section 40 turns on
Registration as a credit provider turns on outstanding principal debt. It used to turn, alternatively, on how many credit agreements a lender had — that trigger was removed by the 2014 amendment, and the threshold prescribed in 2016 is R0.
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 It has been superseded, and it is the single most common error in South African material on this subject.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 numbers are routinely confused. They govern different things:
| Figure | What it governs |
|---|---|
| R0 | The registration threshold under section 40. It is 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. |
02 — When the Act appliesOrdinary arm’s-length credit
| Borrower and agreement | Treatment | Why |
|---|---|---|
| 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. |
03 — Common errorsSix things that are commonly said and are wrong
Naming the specific mistake is more useful than a general caution. Some of these appeared on this site before September 2026 and have been corrected.
- “No registration is needed because a registered credit provider is involved.”
- 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.
- “Occasional lending is exempt because it is only one or two loans.”
- The number-of-agreements trigger was removed in 2014 and the prescribed threshold is R0.
- “Every business facility above R250,000 is excluded.”
- Credit facilities are classified differently from credit transactions. The R250,000 large-agreement threshold does not simply carry across to facilities.
- “A trust is a juristic person, so the exclusions apply.”
- Not every trust is a juristic person for the purposes of the Act.
- “Buying existing loans avoids registration, because the lending was done by somebody else.”
- A person who acquires the rights of a credit provider falls within the statutory definition. Acquisition is not an automatic exemption.
- “One assessment covers the whole chain.”
- The capital-provider-to-vehicle agreement and the vehicle-to-borrower agreement are assessed separately. Outsourcing administration does not answer the first one.
04 — Two agreements, two answersAssess your own agreement, not the chain
Where capital reaches a borrower through a vehicle, there are at least two agreements: the one between you and the vehicle, and the one between the vehicle and the borrower. They are assessed separately. Outsourcing administration, or using a registered originator, does not by itself answer the legal position of the first agreement.
Your own position depends on which of the four you are in:
- Make a loan to a borrower
- 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.
- Buy the rights to loan repayments
- 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.
- Lend to a lending business
- 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.
- Invest in a fund that makes loans
- 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.
What you would hold works through each position in full.
05 — Other regimesSeparate questions, separate answers
Registration under the National Credit Act is not financial-services authorisation, and it confers no permission to raise repayable money from the public.
- 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 ↗
- 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 ↗
- 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 ↗
06 — SourcesRead it yourself
- National Credit Act 34 of 2005 ↗ — Sections 1, 4 and 9 — definitions, application, and categories of credit agreement.
- National Credit Amendment Act 19 of 2014 ↗ — Section 10 amends section 40, removing the alternative trigger based on the number of credit agreements.
- Registration threshold notice, 2016 ↗ — Prescribes the threshold for credit-provider registration at R0.
- Thresholds notice, 2006 ↗ — Sets the R1 million juristic-person threshold and the R250,000 large-agreement threshold. Its registration threshold has since been superseded.
The Association publishes education, frameworks, standards and public records. It does not recommend an arrangement to a particular person, assess whether one suits their circumstances, or act as an intermediary — that is advice on a financial product, and it is licensed work. If the answer matters to a decision you are about to take, put the question to an attorney or a registered compliance professional.