Run the checker
Answer each question as it appears. The flow follows the statutory test in order, and each outcome cites the section it rests on. It is a guide to the application question only — not a full compliance check, and not legal advice.
Does the NCA apply to your agreement?
1.Is the arrangement a credit agreement under section 8?
A credit agreement exists where payment is deferred and a charge, fee or interest is payable (a credit transaction), or it is a credit facility (e.g. an overdraft or revolving account) or a credit guarantee (a suretyship for such credit). Interest-free credit with no fees is not a credit agreement, and insurance, a lease of immovable property and stokvel transactions are excluded outright.
This checker is general guidance on the application test in NCA ss 4–9, not legal advice, and it does not cover every edge case — for example, incidental credit agreements are subject to the Act only in part (s 5), and an agreement with the Reserve Bank as credit provider, or a foreign credit provider, is separately excluded (s 4(1)(c)–(d)). Because the application test turns on substance, a borderline arrangement should be checked with us. Figures verified 26 June 2026. *A trust with three or more trustees is treated as a juristic person for the NCA; a smaller trust is not.
How the application test works
Section 4(1) is the gateway. It casts the net wide — the Act reaches every credit agreement at arm’s length with an effect in South Africa — and then carves out specific exclusions. The questions in the checker simply work through that section and the definitions it depends on.
Subject to sections 5 and 6, this Act applies to every credit agreement between parties dealing at arm’s length and made within, or having an effect within, the Republic, except— (a) a credit agreement in terms of which the consumer is— (i) a juristic person whose asset value or annual turnover, together with the combined asset value or annual turnover of all related juristic persons, at the time the agreement is made, equals or exceeds the threshold value determined by the Minister in terms of section 7(1); (ii) the state; or (iii) an organ of state; (b) a large agreement, as described in section 9(4), in terms of which the consumer is a juristic person whose asset value or annual turnover is, at the time the agreement is made, below the threshold value determined by the Minister in terms of section 7(1); (c) a credit agreement in terms of which the credit provider is the Reserve Bank of South Africa; or (d) a credit agreement in respect of which the credit provider is located outside the Republic, approved by the Minister on application by the consumer in the prescribed manner and form.
1. Is it a credit agreement at all? (section 8)
Before the application test even begins, there must be a credit agreement. Section 8 defines the three species — credit facility, credit transaction and credit guarantee — and, critically, makes the catch-all credit transaction depend on both a deferral of payment and a charge, fee or interest.
(1) Subject to subsection (2), an agreement constitutes a credit agreement for the purposes of this Act if it is— (a) a credit facility, as described in subsection (3); (b) a credit transaction, as described in subsection (4); (c) a credit guarantee, as described in subsection (5); or (d) any combination of the above. (2) An agreement, irrespective of its form, is not a credit agreement if it is— (a) a policy of insurance or credit extended by an insurer solely to maintain the payment of premiums on a policy of insurance; (b) a lease of immovable property; or (c) a transaction between a stokvel and a member of that stokvel in accordance with the rules of that stokvel.
[A credit transaction includes] any other agreement, other than a credit facility or credit guarantee, in terms of which payment of an amount owed by one person to another is deferred, and any charge, fee or interest is payable to the credit provider in respect of— (i) the agreement; or (ii) the amount that has been deferred.
That “deferred and a charge” structure is why a genuinely interest-free, fee-free loan is not a credit agreement — and why the courts look at the substance of a deal rather than its label.
2. Are the parties at arm’s length? (section 4(2)(b))
The Act only reaches arm’s-length agreements. Section 4(2)(b) lists the arrangements that are deemed not to be at arm’s length — most importantly for business, shareholder and controlling-interest loans.
in any of the following arrangements, the parties are not dealing at arm’s length: a shareholder loan or other credit agreement between a juristic person, as consumer, and a person who has a controlling interest in that juristic person, as credit provider; a loan to a shareholder or other credit agreement between a juristic person, as credit provider, and a person who has a controlling interest in that juristic person, as consumer; a credit agreement between natural persons who are in a familial relationship and— (aa) are co-dependent on each other; or (bb) one is dependent upon the other; and any other arrangement— (aa) in which each party is not independent of the other and consequently does not necessarily strive to obtain the utmost possible advantage out of the transaction; or (bb) that is of a type that has been held in law to be between parties who are not dealing at arm’s length.
3. The consumer, and the R1 million and R250 000 thresholds
A natural-person consumer is inside the Act. A juristic-person consumer is tested against two thresholds set by the Minister under s 7(1) and fixed by GN 713 of 2006: the R1 000 000 application threshold, and the R250 000 large-agreement line.
On the effective date, and at intervals of not more than five years, the Minister, by notice in the Gazette, must determine— (a) a monetary asset value or annual turnover threshold of not more than R1 000 000 for the purpose of section 4(1); and (b) two further monetary thresholds for the purposes of determining the three categories of credit agreements contemplated in section 9.
The threshold required to be determined in terms of section 7(1)(a) of the Act is R1 000 000.00. The lower threshold required to be determined in terms of section 7(1)(b) of the Act is R15 000.00. The higher threshold required to be determined in terms of section 7(1)(b) of the Act is R250 000.00.
The value used for the R1 000 000 test is not something the credit provider estimates — it is the figure the juristic person itself states when it applies for or enters into the agreement.
the asset value or annual turnover of a juristic person at the time a credit agreement is made, is the value stated as such by that juristic person at the time it applies for or enters into that agreement;
The large-agreement line then decides the s 4(1)(b) exclusion for a below-threshold company:
A credit agreement is a large agreement if it is— (a) a mortgage agreement; or (b) any other credit transaction except a pawn transaction or a credit guarantee, and the principal debt under that transaction or guarantee falls at or above the higher of the thresholds established in terms of section 7(1)(b).
Juristic persons and incidental credit: limited application
Two of the checker’s outcomes flag a partial application of the Act rather than a clean yes/no. First, where a juristic person is inside the Act, s 6 removes the provisions written for individuals.
The following provisions of this Act do not apply to a credit agreement or proposed credit agreement in terms of which the consumer is a juristic person: (a) Chapter 4 — Parts C and D; (b) Chapter 5 — Part A — section 89(2)(b); (c) Chapter 5 — Part A — section 90(2)(o); and (d) Chapter 5 — Part C.
In practice that means a juristic-person borrower gets no reckless-credit or affordability protection (Chapter 4 Part D) and cannot go into debt review (Chapter 5 Part C) — but the registration, cost-of-credit caps and unlawful-agreement provisions still bite. Second, an incidental credit agreement (an overdue account on which a late fee or interest is charged) is subject only to the specified parts of the Act listed in s 5 — so the checker treats it as a special case rather than a full application.
Frequently asked questions
It depends on the company’s size and the size of the loan. A juristic person whose asset value or annual turnover (with related juristic persons) is R1 000 000 or more at the time the agreement is made is excluded from the NCA entirely (s 4(1)(a)(i)). Below R1 000 000, the company is still excluded if the agreement is a large agreement — a mortgage, or a principal debt of R250 000 or more (s 4(1)(b) read with s 9(4)).
Only a smaller company taking a small or intermediate agreement is inside the Act, and even then the reckless-credit and debt-review provisions do not apply to it (s 6). See the R1 million exemption.
No. Under s 8, an agreement is a credit transaction only if payment of an amount owed is deferred and a charge, fee or interest is payable. A genuinely interest-free loan with no fees is not a credit agreement, so the NCA does not apply. But the test is one of substance: a court looks past the label, so a disguised charge or a structured price difference that is in truth a cost of credit can still bring the agreement inside the Act — see invoice discounting vs loans.
Usually not. The NCA applies only to agreements between parties dealing at arm’s length, and s 4(2)(b) deems a shareholder loan — or any credit agreement between a juristic person and a person who has a controlling interest in it — not to be at arm’s length. The Act does not apply, regardless of the amounts involved.
A suretyship for a credit facility or credit transaction is a credit guarantee under s 8(5), but s 4(2)(c) provides that the Act applies to a credit guarantee only to the extent that it applies to the underlying credit facility or transaction. So if the underlying loan is inside the NCA, the suretyship is too; if the underlying loan is excluded (for example, a large loan to a company), the suretyship is outside the Act as well. See guarantees vs suretyships.