A Registered Credit Provider is a business or a person who has more than a hundred credit agreements or credit agreements where the loan amount exceeds R500 000.00. A person or business that fits the above has to register as a credit provider.
What happens if I don't register?
The National Credit Act states that if a person enters into a credit agreement and he/she did not register when they where obliged to the said credit agreement is unlawful and will therefore be declared void. The credit provider will have to repay the consumer all amounts paid to him/her by the consumer. The credit provider will lose all his/her rights in terms of the credit agreement as well as the item (merx) sold.
Say you want to sell your house to your friend for R600 000.00. The house is paid in full and is being rented. You agree with your friend that he may pay you in installments of R50 000 pm. You will charge interest in the amount of 10% per year. This agreement is a credit agreement in terms of the act. Even if you work for a salary as a teacher you have to register as a credit provider.
If your friend decides to stop paying you after 3 instalments he can approach the court to declare the agreement void. The court will grant the application because you where in clear breach of the act. You will have to repay the R150 000.00 to your friend and the house will be forfeited to the state. That is the nature of the beast.