The NCR is responsible for the regulation of the South African credit industry. It is tasked with carrying out education, research, policy development, registration of industry participants, investigation of complaints and ensuring the enforcement of the Act.
In addition to the legal requirement that all credit providers, regardless of value or term of the credit being extended, must register with the NCR, there are other reasons and benefits to do so.
The NCR conducts impact studies within the South African credit industry and assesses the economic position of the country as a whole. They do this in collaboration with the Department of Trade and Industry (DTI) and publish impact studies on the overall market on the back of this. Credit extension is a component that is evaluated in this process. On the back of these findings, the framework for all the various rates and fees, affordability, terms and value, etc, are calculated.
Requirements for approving credit in the industry is then published as legislation for credit providers to adhere to. These include minimum requirements for cost analysis to determine what a consumer can repay in debt at the end of the month. We have all heard of people buying assets, such as houses and cars, only to have them repossessed due to non-payment. This is typically the result of poor financial planning and a lack of proper affordability both on the side of the credit provider as well as the consumers.
You also then find examples where insurance gets cancelled simply because the consumers cannot afford these payments anymore. This leads to challenges, which can ultimately lead to a person losing their job if, for example, they are in a sales role where they are required to have a vehicle but cannot afford one anymore.
Registering with the NCR gives you access to these and other legally required calculations and guidelines to ensure the sustainable continuation of the credit market in South Africa.
Register today with the NCR; it's the rights thing to do legally, as well as for the longevity of your business and the industry.
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