Credit is one of the cornerstones of modern capitalism that lubricates and feeds the economy to promote commercial activity.

However, credit enables people to spend money they don’t have, spend more money than they earn, use credit for ordinary purchases, use credit even when they have cash and use debt to pay off debt. 

The South African population consists predominantly of lower income earners who had limited or no access to regular credit channels. The complex nature of credit agreements rendered many consumers, especially illiterate individuals, vulnerable and often exploited by credit providers.

Before June 2006, credit law in South Africa was governed by the Usury Act (73 of 1968) and the Credit Agreements Act (75 of 1980). These two Acts were replaced by the National Credit Act, which codified several basic rights that the consumer has with regard to the credit market. The National Credit Act (35 of 2005) is part of a comprehensive legislation overhaul designed to protect the consumer against unscrupulous lending and over-indebtedness in the credit market and make credit and banking services more accessible.

Although seemingly complex, the National Credit Act aims to simplify many of the grey areas surrounding the South African credit market. Persons providing advice on credit and related activities must therefore be found competent in terms of the National Credit Act (35 of 2005) known as the NCA Examination.