National Credit Act, 2005 (Act No. 34 of 2005)

Chapter 1 : Interpretation, Purpose and Application of Act

Part B : Purpose and Application

3. Purpose of Act

Purchase cart Previous page Return to chapter overview Next page

 

 

The purposes of this Act are to promote and advance the social and economic welfare of South Africans, promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry, and to protect consumers, by-

a)promoting the development of a credit market that is accessible to all South Africans, and in particular to those who have historically been unable to access credit under sustainable market conditions;

b)ensuring consistent treatment of different credit products and different credit providers;

c)promoting responsibility in the credit market by-

i)encouraging responsible borrowing, avoidance of over-indebtedness and fulfilment of financial obligations by consumers; and

ii)discouraging reckless credit granting by credit providers and contractual default by consumers;

d)promoting equity in the credit market by balancing the respective rights and responsibilities of credit providers and consumers;

e)addressing and correcting imbalances in negotiating power between consumers and credit providers by-

i)providing consumers with education about credit and consumer rights;

ii)providing consumers with adequate disclosure of standardised information in order to make informed choices; and

iii)providing consumers with protection from deception, and from unfair or fraudulent conduct by credit providers and credit bureaux;

f)improving consumer credit information and reporting and regulation of credit bureaux;

g)addressing and preventing over-indebtedness of consumers, and providing mechanisms for resolving over-indebtedness based on the principle of satisfaction by the consumer of all responsible financial obligations;

h)providing for a consistent and accessible system of consensual resolution of disputes arising from credit agreements; and

i)providing for a consistent and harmonised system of debt restructuring, enforcement and judgment, which places priority on the eventual satisfaction of all responsible consumer obligations under credit agreements.