This section outlines how to configure loan products specifically for Unsecured Credit Transactions in South Africa, adhering to the National Credit Act (NCA), 2005, and its associated regulations.

Overview: National Credit Act, 2005

The Minister of Trade and Industry, under Section 171 of the National Credit Act, 2005 (Act No. 34 of 2005), has established regulations for various credit agreements, including:

• Mortgage Agreement
• Credit Facility
• Unsecured Credit Transaction
• Development Credit Agreement - Small Business
• Development Credit Agreement - Housing
• Short Term Credit Agreement
• Other Credit Agreement
• Incidental Credit Agreement
• Development Credit Agreement - Education
• Development Credit Agreement - Co-operative
• Development Credit Agreement - Other

For the full National Credit Act, 2005, please refer to: http://www.acts.co.za/nat_credit_act/index.htm

Key Sections of the NCA:

• Cost of Credit: Act 34 of 2005 Section 101
• Credit Fees or Charges: Act 34 of 2005 Section 102
• Interest: Act 34 of 2005 Section 103
• Changes to Interest, Credit Fees or Charges: Act 34 of 2005 Section 171
• Maximum Rates of Interest, Fees and Charges: Act 34 of 2005 Section 171. Note the reference to the Minister's decisions, which were published in the Government Gazette.
  • Maximum Prescribed Interest Rate: NCA Regulation 42.(1)
  • Maximum Initiation Fee: NCA Regulations 42.(2) and 43
  • Maximum Service Fee: NCA Regulation 44
• Credit Insurance: Act 34 of 2005 Section 106

Additional Setups

Financial Ledgers

You can choose to use the same ledgers as those used by the standard RSA Interest Calculation Method.

If not, you must add two Interest Sub-Ledgers under the main interest control account:

• One for Interest Received
• One for Interest Reversed
  • Alternatively, you may add just one ledger if you prefer.

Financial Events

You must add three new Events:

• In Default Interest Charged:
  • Event Attribute: In Default Interest Charged
  • Debit (Dr): Client Control
  • Credit (Cr): Interest Received or In Default Interest Received (depending on your setup choice)
• In Default Interest Adjustment:
  • Event Attribute: In Default Interest Adjustment
  • Debit (Dr): Client Control
  • Credit (Cr): Interest Received or In Default Interest Received (depending on your setup choice).
• In Default Interest Reversal:
  • Event Attribute: In Default Interest Reversal
  • Debit (Dr): Interest Reversed or In Default Interest Reversed (depending on your setup choice)
  • Credit (Cr): Client Control

When setting up a new RSA Interest Calculation Method Loan Product, you are required to set up a corresponding Loan Agreement document for that product.

Documentation

Section	Description	Documentation
General	General configurations for the loan products	General
Interest and Fees	Interest and Fees configuration for the loan products	Interest and Fees
Users	User access to loan products	Users