We thought it may be of use to those who are unaware of the current threshold of the National Credit Act (“NCA”), to give a brief summary of when a credit agreement falls within the ambit of the Act and as such, when reference is to be made to section 129 and 130 of the NCA in a letter of demand and/or a summons.

The applicability of the NCA is subject to certain thresholds, in that the NCA applies to every credit agreement between parties dealing at arm’s length, except-

a credit agreement in terms of which the consumer is:

a juristic person whose asset value or annual turnover at the time that the agreement is made exceeds the threshold value (which is currently set at R1 million);
the State or Organ of State;
 

A credit agreement in which the credit provider is the Reserve Bank.
 

A credit agreement in which the credit provider is located outside the Republic and approved by the Minister on application by the consumer in the prescribed manner.
 

A large agreement, 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. A Large agreement is fundamentally a credit agreement secured by a mortgage bond and any other credit transaction, other than a pawn transaction or a credit facility, with a principal debt of R250 000.00 or more. Please note that a distinction is drawn between a small, intermediate and large agreement.
Therefore if the credit agreement does not fall within the above confines, then reference must be made to section 129 and 130 of the NCA.

A juristic person is given a wide meaning in terms of the Act and includes, apart from others, certain trusts, partnerships, corporate and unincorporated bodies.