BASA Statement on the Withdrawal of Draft Amendments to National Credit Act Regulations. 

Publication Date: 15/09/2025

The Banking Association South Africa (BASA) is concerned that the withdrawal of draft amendments to National Credit Act (NCA) regulations – which are aimed at making it easier for small businesses to access finance – has compromised due process and the interests of micro, small and medium enterprises (MSMEs), on the basis of known misinformation.

1. In summary, the proposed amendments to the NCA regulations would enable credit providers to tailor affordability assessments more appropriately to individual MSMEs. It is unfortunate that the Minister of Trade, Industry and Competition, Parks Tau, did not issue an accompanying memorandum that could have made it clear that the aim of the proposed amendments is to make it easier for MSMEs to access finance.
2. The proposed draft amendments have nothing to do with allowing credit bureaus to receive credit information from educational institutions. The provision for credit bureaus to receive credit information from educational institutions has been in the NCA since 2006. It is not a new proposal and has not been introduced in the draft amendments. It is unfortunate that the Minister and his department were seemingly not aware of the provisions in the legislation for which they are responsible. Withdrawing the proposed amendments does nothing to protect the interests of students. By withdrawing the proposed amendments, the minister has only succeeded in delaying and disrupting efforts to improve MSME access to financing.
3. Of great concern is that the minister withdrew the proposed amendments before the closing date for comments on the draft regulations. He did this on the basis that the vast majority of the submissions received, until then, were opposed to the proposed regulations, without presenting any detail to that effect. That the Minister chose not to wait to hear from those who might have made different submissions is not a reflection of the “robust nature of South Africa’s democracy”, but rather an indication of a disregard for proper, meaningful and legally required consultation, in the face of misplaced and misinformed political pressure. This sets a dangerous precedent for current and future legislative processes in South Africa.

As it stands, extensive work undertaken by a business-government partnership in support of small businesses has now been disrupted, renewing concerns that government does not have a coherent, complementary economic policy, but rather a cluster of ministers and departments that act in their own short-term interests.

The FinScope MSME South Africa 2024 Report found that there are approximately three million medium, small and micro-entrepreneurs in South Africa, employing around 13.4 million people.

Importantly, given South Africa’s high unemployment rates, particularly among the youth, the FinScope MSME data indicates that 30% of MSME owners are 35 years old or younger. South African banks are committed to supporting MSMEs in South Africa and had extended R274 billion in SME retail lending by January 2025, according to the South African Reserve Bank. The amendments to the NCA – along with other necessary reforms – would facilitate banks and other credit providers doing more.

The NCA is now almost twenty years old and needs to be reviewed to better meet the needs of MSMEs, credit providers and South Africa’s developing economy. The proposed amendments were an important first step to make it easier for MSMEs to access finance. The NCA must still be aligned with its regulations and the legislative framework streamlined to make it easier for MSME to access credit. Amending legislation to make it simpler, more relevant and practical is the best way to help MSMEs contribute to economic growth, without adding to bureaucracy and government initiatives for which there is no budget.

The proposed amendments to the NCA showed that good faith partnerships between government and business can produce beneficial outcomes for the economy and society. Minister Tau should now move with urgency to ensure that they are adopted and not derailed by misinformation.