National Credit Act

Question 1

List 8 credit transactions in terms of section 8(4) of the NCA

Answer 1

(a) Pawn transactions (goods serving security as a loan);

(b) Discount transactions (goods/ services provided to the consumer over a period of time and a lower price applies if it’s paid within a certain period);

(c) Incidental credit agreements (goods/ services provided to the consumer; account tendered -
i) lower price if paid within a certai period
ii) fee, charge or interest payable if the price isn’t paid before a given date);

(d) Instalment agreements (sale of movables on instalment with reservation of ownership or right to repossession);

(e) lease (of movables when ownership passes at the end of the agreement);

(f) mortgages (ex: money loan secured by a pledge of a movable);

(g) secured loans (ex: money loan secured by a pledge of a movable);

(h) any other credit agreement in respect of which payment is deferred (ex: direct loan)

Question 2

What is a credit facility in terms of section 8(3) of the NCA?

Answer 2

An agreement in terms of which:

1. A credit provider undertakes to either:
   a) Supply of goods/ services
   b) or to make payments to the consumer, on his behalf, or at his direction AND to either

i) *defer the consumer’s obligation to pay any part of the cost of goods/ services or to repay to the credit provider; OR
ii) **bill the consumer periodically for any part of the costs of those goods/ services or amount in b)

2. Charge, fee or interest is payable to the credit provider in respect of:
   a) the amount deferred* or
   b) ** amount billed and not paid within the time provided in the agreement