Guide for South African lenders · Updated 27 October 2026

How to start a micro lending business in South Africa: NCR registration, costs and interest caps

The short answer

To start a micro lending business in South Africa, register with the National Credit Regulator (NCR) as a credit provider before your first loan: since 11 November 2016 there is no minimum size. Apply on NCR Form 2 with the R550 fee, pass the fit and proper checks, then pay R1,000 to register plus R250 per branch.

Law: National Credit Act 34 of 2005, sections 40 and 42; registration threshold set at R0 by GN 513, GG 39981 (11 May 2016), in force 11 November 2016
NCR fees: R550 application fee; R1,000 registration fee for a book under R250,000; R250 per branch (GN 514, GG 39981, 11 May 2016)
Renewal: Annual fee due by 31 July; the registration lapses if it is still unpaid after the 30-day grace period
Short-term loans: Up to R8,000 repaid within 6 months: at most 5% interest a month on the first loan, 3% a month on later loans in the same calendar year
Unsecured loans: At most the repo rate plus 21% a year: 28.25% at the 7.25% repo rate set on 23 September 2026
Fee caps: Initiation fee R165 plus 10% of the amount above R1,000, at most R1,050 and never above 15% of the principal debt; service fee at most R60 a month

What a micro lender is and who must register

A micro lender is a business that lends small amounts of cash to individuals, usually as short-term or unsecured loans. The National Credit Act 34 of 2005 (NCA) has no separate micro lender licence: the business is a credit provider. Its loans are usually one of two types in regulation 39 of the National Credit Regulations: short-term credit transactions (up to R8,000, repayable within six months) and unsecured credit transactions (no security other than credit life insurance).

Under section 40(1), as amended in 2014, you must register once the total principal debt owed to you under all outstanding credit agreements (other than incidental credit) exceeds the threshold set under section 42(1). The Minister set that threshold at nil (R0) in Government Notice 513, Government Gazette 39981 of 11 May 2016. A new threshold takes effect six months after publication (section 42(2)), so since 11 November 2016 every credit provider must register, whatever its size. The old tests of 100 agreements or R500,000 of debt no longer apply.

An unregistered lender may not offer or extend credit (section 40(3)), and its agreements are unlawful and void to the extent set out in section 89 (section 40(4)). At 31 March 2025 the NCR had 8,147 registered credit providers with 41,669 branches. Check any lender on the NCR register of credit providers.

Registration steps and documents

Set up the business. Register a company with CIPC or trade as a sole proprietor, register with SARS (a criterion under section 48(1)(c)) and open a business bank account.
Complete NCR Form 2, the credit provider application. It asks for your products, the two official languages your documents will be available in (section 63), your commitments on black economic empowerment and on combating over-indebtedness (section 48(1)(a) and (b)), your loan book figures, your directors and every premises you will lend from.
Attach the documents the NCR lists: CIPC registration document; share certificates for a company; certified ID or passport copies for every member, director, shareholder, trustee, partner or sole proprietor; a resolution for a juristic person; a criminal clearance certificate for each of those people from SAPS or an NCR-approved provider, dated within six months; a stamped bank letter, cancelled cheque or bank statement dated within six months; proof of SARS registration; and proof of payment of the R550 application fee.
Answer queries within 15 business days (regulation 4(3)). The NCR may refuse the application if the information does not arrive in time (section 45(2)).
Accept the proposed conditions. The NCR sends proposed conditions of registration (section 48(3)) and you have 20 business days to respond (section 48(5)). Return them signed, with proof that you paid the registration and branch fees.
Receive your certificate with your NCRCP number, the reference for every payment to the NCR.

Fit and proper. A natural person cannot register if they are under 18, an unrehabilitated insolvent, were removed from an office of trust for fraud, or were convicted in the last 10 years of theft, fraud, forgery, perjury, corruption, violence or an NCA offence and sentenced to prison without the option of a fine (section 46). A company is barred if a disqualified person manages or controls it (section 47(2)), and since 13 March 2015 the NCR may apply a fit and proper test (section 45(3)). The Act sets no minimum BEE level: the NCR weighs your commitments and may attach conditions.

How much an NCR certificate costs

Government Notice 514, Government Gazette 39981 of 11 May 2016, sets the fees, and the NCR still lists them in October 2026. One scale, based on your total principal debt, covers both the registration fee and the annual renewal fee.

Item	Fee
Application fee (non-refundable)	R550
Registration or renewal: principal debt under R250,000	R1,000
R250,000 to under R500,000	R1,500
R500,000 to under R1 million	R2,000
R1 million to under R5 million	R2,500 plus 0.1% of the debt above R1 million
R5 million to under R100 million	R7,000 plus 0.01% of the debt above R5 million
Branch fee	R250 for each premises you lend from
Late renewal penalty	10% of the fee if under 15 days late, 20% if more than 15 days late

A new lender with one office pays R1,800 to get registered: R550 plus R1,000 plus R250. A lender with a R3 million book and two branches renews for R4,500 plus R500: R5,000.

Renewal is due by 31 July every year. After a 30-day grace period with the penalty, the registration lapses automatically and you must apply again as a new applicant (NCR Circular 3 of 2023).

How long NCR registration takes

Neither the Act nor the regulations set a deadline for the NCR. It measures only the last step: in 2024/25 it registered 96.57% of applicants within 6 business days of receiving their signed proposed conditions and registration fee. Earlier steps are not measured, so submit a complete file: each missing document means another request and another wait.

How much interest micro lenders can charge

The caps are in regulations 42 to 44 of the National Credit Regulations, as replaced by Government Notice R1080, Government Gazette 39379 of 6 November 2015, in force since 6 May 2016 and unchanged since. RR is the Reserve Bank repurchase rate (now called the SARB policy rate): 7.25% since the 23 September 2026 decision, with the next decision due on 19 November 2026.

Credit type	Maximum interest	Maximum initiation fee
Short-term credit transaction (up to R8,000, repaid within 6 months)	5% a month on the first loan, 3% a month on later loans within a calendar year	R165 plus 10% of the amount above R1,000, at most R1,050
Unsecured credit transaction	RR plus 21% a year (28.25% at a 7.25% repo rate)	R165 plus 10% of the amount above R1,000, at most R1,050

Two more limits apply to the initiation fee: it may never exceed 15% of the principal debt, and it may be charged only on a new credit agreement (regulation 43(3) and (4)). The monthly service fee is capped at R60 (regulation 44).

Example: on a R2,000 first loan repaid after one month, the most you may charge is R100 interest (5%), a R265 initiation fee (R165 plus 10% of R1,000, below the 15% ceiling of R300) and a R60 service fee, so R425 in all. Once the account is in default, accrued interest, fees and collection costs may not exceed the unpaid principal debt at the date of default (section 103(5), the in duplum rule).

The affordability assessment

Before every loan, section 81(2) requires reasonable steps to assess the borrower's understanding of the risks and costs, repayment history, and existing financial means, prospects and obligations. Lending without that assessment, or when it shows the borrower cannot afford the loan, is reckless credit, and a court may set aside or suspend the borrower's obligations (section 83).

Regulation 23A sets the method:

establish gross income and deduct statutory deductions and the Table 1 minimum living expenses;
deduct every debt repayment on the borrower's credit bureau profile, plus maintenance and other necessary expenses, to reach discretionary income;
check repayment history within 7 business days before approval;
disclose the credit cost multiple and the total cost of credit in the pre-agreement statement and quotation.

Regulation 23A(4), which listed the proof documents (three payslips or bank statements), was set aside in Truworths Ltd v Minister of Trade and Industry [2018] ZAWCHC 41. The Western Cape High Court held that you must still establish gross income, so keep payslips or bank statements on file as proof. If the borrower lied and that materially affected your assessment, you have a complete defence to a reckless credit claim (section 81(4)).

Reporting to the NCR, the credit bureaux and the FIC

Report	Who	Due
Statistical return (Form 39)	Annual disbursements above R15 million	Quarterly: 15 May, 15 August, 15 November and 15 February
Statistical return (Form 39)	Annual disbursements below R15 million	Once a year, by 15 February
Annual financial statements, Annual Financial and Operational Return (Form 40) and assurance engagement report	All registered credit providers, signed by an accounting professional	Within 6 months of your financial year-end
Compliance report	All registered credit providers, signed by the credit provider	Within 6 months of your financial year-end

Form 39 goes to returns@ncr.org.za and the annual reports to submissions@ncr.org.za (NCR Circulars 4 and 5 of 2025).

Credit bureaux. Regulation 19(13) requires you to report credit information to the bureaux as your conditions of registration and NCR guidelines direct. Give the borrower at least 20 business days' notice before you report adverse information such as a default or a handover for collection (regulation 19(4)).

FIC Act. Credit providers are accountable institutions under item 11 of Schedule 1. Register with the Financial Intelligence Centre on goAML, adopt a risk management and compliance programme, appoint a compliance person, screen clients against the targeted financial sanctions list and report cash transactions above R49,999.99 within three working days.

Collections and the operating basics

Loan management system. It should produce the quotation (NCR Form 20 for small agreements), pre-agreement statement and agreement, apply the caps, track arrears and produce your bureau files and NCR returns.
DebiCheck collections. Have the borrower approve a DebiCheck mandate before you pay out: see DebiCheck for lenders.
No cards or PINs. A term that makes the borrower hand over an ID document, bank or ATM card, or a PIN is unlawful (section 90(2)(l)).
Arrears. Deliver a section 129 notice before any legal action, and keep default charges and collection costs within the debt collection fee rules.

Questions people ask

How long does it take to get an NCR certificate?

The law sets no fixed period. In 2024/25 the NCR registered 96.57% of applicants within 6 business days of receiving their signed proposed conditions and registration fee; the evaluation before that step depends on how complete your application is.

How much does an NCR certificate cost?

A new lender with a book under R250,000 pays a R550 application fee, a R1,000 registration fee and R250 per branch: R1,800 for one office. The renewal fee, on the same scale, is due by 31 July every year.

How do I get a licence to lend money in South Africa?

There is no separate lending licence. You register with the NCR as a credit provider under section 40 of the National Credit Act, which every lender has had to do since 11 November 2016, whatever its size.

What are the requirements for micro lending?

NCR registration, SARS registration, and owners and directors who are not disqualified under sections 46 and 47, for example by a fraud conviction in the last 10 years. Once you lend: affordability assessments, prices within the caps, NCR returns and FIC Act compliance.

How much interest can micro lenders charge in South Africa?

On short-term loans (up to R8,000 over at most six months), 5% a month on the first loan and 3% a month on later loans in the same calendar year. On other unsecured loans, the repo rate plus 21% a year: 28.25% at the 7.25% repo rate set on 23 September 2026.

What is a micro lender?

A credit provider that lends small cash loans to individuals, usually short-term or unsecured. The National Credit Act treats it like any other credit provider: it must register with the NCR and follow the same caps and rules.

How many registered credit providers are there in South Africa?

At 31 March 2025 the NCR had 8,147 registered credit providers with 41,669 branches, according to its 2024/25 annual report.

Sources

This guide explains the law in general terms. It is not legal advice for a particular case.