Under the National Credit Act (NCA), the most a credit provider may charge in interest is the South African Reserve Bank's repo rate plus a fixed margin. The margin depends on the type of credit. With the repo rate at 7.25%, the cap on unsecured credit is 28.25% a year.
These caps only apply to agreements the NCA covers. For a business, the NCA usually covers a company or close corporation (CC) only if both its annual turnover and its asset value (counting related companies) are under R1 million. Even then, it doesn't cover a loan or other credit transaction of R250,000 or more. Check that first (see "Who the caps apply to" below).
The caps at a repo rate of 7.25%
The repo rate has been 7.25% since 25 September 2026 (checked 4 November 2026). The next Monetary Policy Committee meeting is on 19 November 2026. If the repo rate changes, every cap linked to it moves by the same amount.
| Type of credit | Rule in the regulations | Cap at repo 7.25% |
|---|---|---|
| Mortgage agreements | repo + 12% a year | 19.25% a year |
| Credit facilities | repo + 14% a year | 21.25% a year |
| Unsecured credit transactions | repo + 21% a year | 28.25% a year |
| Developmental credit (small business, and low income housing) | repo + 27% a year | 34.25% a year |
| Short-term transactions | fixed, not linked to repo | 5% a month on the first loan, 3% a month on later loans in the same calendar year |
| Other credit agreements | repo + 17% a year | 24.25% a year |
| Incidental credit agreements | fixed, not linked to repo | 2% a month |
The caps are linked to the repo rate, not to the prime lending rate that banks quote.
What the regulation says
The table comes from Regulation 42, Table A, of the NCA regulations, as replaced by Notice 1080 in Government Gazette 39379 of 6 November 2015. The new rules came into force six months after they were published. Table A in the Gazette reads:
"1. Mortgage agreements RR + 12% per year 2. Credit facilities RR + 14% per year 3. Unsecured credit transactions RR + 21% per year 4. Developmental credit agreements RR + 27% per year 4.1 Small business 4.2 Low income housing 5. Short-term transactions 5% per month on the first loan and 3% per month on subsequent loans within a calender year 6. Other credit agreements RR + 17% per year 7. Incidental credit agreements 2% per month"
In the original 2006 regulations (Government Gazette 28864), Regulation 42 says "RR indicates the reference rate, being the ruling SA Reserve Bank Repurchase" rate, which is the repo rate.
Fees the NCA also caps
The same notice caps the initiation fee (a once-off fee for opening the agreement) in Table B, and the monthly service fee in Regulation 44. These limits are fixed in rand and don't move with the repo rate.
| Type of credit | Most the initiation fee can be |
|---|---|
| Credit facilities, unsecured credit, short-term credit and other credit agreements | R165 per agreement, plus 10% of the amount over R1,000, never more than R1,050 |
| Mortgage agreements | R1,100 per agreement, plus 10% of the amount over R10,000, never more than R5,250 |
| Developmental credit for a small business | R275 per agreement, plus 10% of the amount over R1,000, never more than R2,600 |
| Developmental credit for low income housing (unsecured) | R550 per agreement, plus 10% of the amount over R1,000, never more than R2,600 |
| Incidental credit agreements | Nil |
The Gazette states the service fee limit this way: "The maximum monthly service fee, prescribed in terms of section 105 (1) of the Act, is R60". So a funder may charge no more than R60 a month as a service fee on an NCA-covered agreement.
The notice also says an initiation fee "must only be charged when a new credit agreement is established with a consumer".
Who the caps apply to
The NCA covers some agreements with businesses, not all of them. The two thresholds were set in Notice 713 of 2006, Government Gazette 28893:
- R1,000,000. "The threshold required to be determined in terms of section 7(1)(a) of the Act is R1 000 000.00." The Act leaves out a juristic person (such as a company) whose "asset value or annual turnover, together with the combined asset value or annual turnover of all related juristic persons ... equals or exceeds" that threshold. Either test is enough to put a business outside the NCA.
- R250,000. "The higher threshold required to be determined in terms of section 7(1)(b) of the Act is R250 000.00." A "large agreement" is a mortgage, or "any other credit transaction" where the principal debt "falls at or above" this figure. A large agreement with a juristic person under the R1,000,000 threshold is also outside the NCA.
So, in short: for a business, the NCA usually covers a company or close corporation (CC) only if both its annual turnover and its asset value (counting related companies) are under R1 million. Even then, it doesn't cover a loan or other credit transaction of R250,000 or more.
One detail matters for overdrafts. Section 9 of the Act sorts a credit facility, such as an overdraft or revolving facility, only into the "small" or "intermediate" categories, not the "large" one. So the R250,000 rule, as the Act words it, is about credit transactions, not facilities. If you have a facility, ask the funder whether it treats it as covered by the NCA.
Whether a merchant cash advance is covered depends on how the agreement is set up. The South African SME Finance Association's code describes the card-split version as a sale and purchase, not a loan. A fixed-repayment advance is set out differently by each funder, and the agreement states its legal structure. Ask the funder whether it treats your agreement as credit under the NCA.
Why this matters to you
If your agreement is NCA-covered, a funder can't lawfully charge more interest, or a higher initiation or service fee, than the caps for its type. If you are outside the NCA, there is no cap from these tables, so compare offers on the total you pay back in rand. Our page on the true cost of business funding shows how.
Since November 2016 anyone who gives credit has had to register with the National Credit Regulator, whatever the size of its book. Registered credit providers have a number that starts NCRCP, which you can check on the NCR's register. QAC does not lend and is not registered with the NCR.
Next step
If you want to know which funding types could fit your business, check your fit.
Sources
- gov.za: Notice 1080, Government Gazette 39379, 6 November 2015
- gov.za: No
- justice.gov.za: National Credit Act 34 of 2005 as passed: s4, s4, s9 to
- gov.za: Notice 713 of 2006, Government Gazette 28893: thresholds "R1 000 000.00" and "R250 000.00
- sanews.gov.za: SAnews, 23 September 2026: the MPC decided "to increase the policy rate by 25 basis points to 7.25%", "effective 25 September
- resbank.co.za: next MPC "2026-11-19
- sasfa.net: The MCA is a discounted sale and purchase agreement, and not a loan
- ncr.org.za: NCR media release, November 2016: "as from the 11th November 2016, any person or entity that is involved in the provision of credit is now required to register
- ncr.org.za: NCR register of credit providers