Ithala Development Finance Corporation Limited

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National Credit Act

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Contact Ithala

	Physical Address
	17 Isilo Drive, Umlazi 4066

	Postal Address
	P.O. Box 2801 Durban 4000

	Telephone Number
	031 907 8911

	Fax Number
	031 907 5685

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National Credit Act

WHAT IS NATIONAL CREDIT ACT (NCA)?

The National Credit Act is a recently published legislation which aims at regulating the credit market by affording equal access to credit in a non-discriminatory manner whilst ensuring that consumers are protected from over-indebtedness. It applies to all new agreements from 01 June 2007. Agreements in existence prior to 01 June 2007 will not be affected.

RIGHTS AND OBLIGATIONS

The Act seeks to protect customers from over-indebtedness by placing an onus on the credit grantor to take into consideration, all the expenses of the client before granting credit. The credit grantor must satisfy himself/herself that the client can afford to pay back the amount granted. Failure to do so by the credit grantor may lead to the agreement being considered unlawful, resulting in the credit grantor forfeiting their money.

Consumers have the following rights:

To apply for credit
To receive documents
To be given reason for credit being refused or discontinued
To receive credit agreement information in Languages other than English
To receive information in plain and understandable language
To have access to credit records and information held by credit bureaux.
Protection of their rights

Customers are obliged to give detailed and honest information. Customers who give inaccurate information in order to qualify for loans, cannot expect to have the agreement considered unlawful, and will be obliged to pay. Their information, including other grantors where credit has been requested, will be deposited centrally.

Client information, including other grantors where credit has been requested, will be deposited centrally.

DEDUCTION METHODS

A notable impact of this Act is the abolition of deduction methods which give preference to one creditor over the other, such as preferred debit orders. This is coupled with a cap being placed in interest which can be charged.

Every lender is obliged to keep a consumer credit policy, which is available on request.

CONCLUSION

The Act is a watershed in the development of the credit industry and will have far reaching effects.

Further information can be obtained from www.ithala.co.za or 080133 1130