In March 2006, President Thabo Mbeki signed the National Credit Act, thus giving birth to a brand-new era of legalisation, and control to one of the oldest forms of business in the world — granting credit.
In South Africa, some credit grantors abused their power to the detriment of consumers. Credit grantors allowed misinformed consumers to overspend, so long as there were sufficient security and assets that could be attached ultimately to pay for the debt. Consumers buying on credit had no recourse. If they did not pay, they were blacklisted, causing other credit grantors to take action for the recovery of their debt.
On the other hand, some consumers have abused their right to obtain and use credit by giving incorrect information. Every time a credit grantor encountered this conduct from a consumer, more stringent procedures were put in place — to the detriment of future consumers.
The National Credit Act corrects all these wrongs. The rights and obligations of both the consumer and the credit grantor are clearly stipulated in the National Credit Act.
The credit law of South Africa is based on the National Credit Act 34 of 2005 and should be studied by every person in South Africa. Everybody benefits from the laws and regulations promulgated. But ultimately everybody has a responsibility as far as buying goods or receiving services on credit, or obtaining funds and paying back at a later date.