In South Africa’s credit market, transparency is not just good practice – it is the law. One of the most important consumer protection measures in this space is found in Section 92 of the National Credit Act (NCA). This section plays a critical role in ensuring that consumers are fully informed and fairly treated before they commit to a large or intermediate credit agreement.
At its core, Section 92 is about giving consumers the time and information they need to make sound financial decisions, without pressure or surprises.
What Section 92 Requires from Credit Providers
When a credit provider offers a large or intermediate credit agreement, the law requires them to issue a pre-agreement statement and quotation, commonly known as Form 20. This document is not a formality – it is a detailed breakdown of the proposed credit agreement.
The pre-agreement statement must clearly outline:
The total cost of credit
Interest rates and fees
Repayment amounts and schedules
Any additional charges linked to the agreement
Key terms and conditions that will govern the credit relationship
In simple terms, it shows the consumer exactly what they are signing up for, in plain and measurable financial terms.
The Five-Business-Day Consideration Period
One of the most consumer-friendly aspects of Section 92 is the mandatory five business day consideration period. After receiving the pre-agreement statement and quotation, the consumer is given five business days to either accept or reject the offer.
During this period:
The consumer is under no obligation to sign immediately
They may compare offers from different credit providers
They can seek advice or ask questions about the terms
The credit provider may not make last-minute changes to the quoted terms
This cooling-off style period shifts power back to the consumer, ensuring decisions are made calmly and with full understanding, rather than under pressure.
Preventing Unfair Last-Minute Changes
Section 92 also protects consumers from a common historical problem in credit agreements: last-minute changes. Once the quotation is issued, the credit provider is bound by it for the five-day period. This means no sudden increases in fees, interest rates, or hidden costs just before signing.
As a result, trust and fairness are reinforced, and the agreement that is eventually signed reflects exactly what was disclosed upfront.
Why Section 92 Matters
Section 92 is more than a compliance requirement – it is a safeguard against over-indebtedness and unfair lending practices. It encourages responsible borrowing and responsible lending by:
Promoting transparency
Reducing rushed financial decisions
Strengthening informed consent
Building confidence in the credit market
For consumers, it provides clarity and peace of mind. For credit providers, it sets a clear standard of ethical and lawful conduct.
Final Thoughts
Understanding Section 92 of the National Credit Act is essential for both consumers and credit providers. It ensures that credit agreements are entered into openly, fairly, and with full knowledge of the financial implications involved.
If you are a credit provider or a consumer seeking guidance on compliance with the National Credit Act, including pre-agreement disclosures and quotations, professional support can make all the difference. For expert assistance and practical compliance solutions, readers are encouraged to contact Zweautonda Mario Tshikalange Studio for support tailored to South Africa’s regulatory environment.