All credit providers will need to register from 11 November 2016

Janine Will

With effect from 11 November 2016, the Minister has prescribed the new threshold as nil. In other words, every person who provides credit to another is required to register as a credit provider, no matter how much credit he or she has provided.

Registration as a credit provider is crucial because a credit agreement which is concluded by a credit provider who is not registered as such, but is required to be so registered, is an unlawful agreement, with two limited exceptions. The agreement would be lawful if:

1. at the time the credit agreement was concluded, or within 30 days after that time, the credit provider had applied for registration and was awaiting a determination of that application
2. at the time the credit agreement was concluded, the credit provider held a valid clearance certificate issued by the National Credit Regulator

If the credit agreement is unlawful, then, despite any other legislation or any provision in an agreement to the contrary, a court is required to make a just and equitable order including a directive that the credit agreement is void as from the date on which the agreement was concluded.