#ncr-complicance
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Mobiloan imposes a maximum loan amount restriction of R7,100 on all NCR Short Term Loan Products, due to the following regulation.
Regulation 39(2) of the NCA defines a “short term credit transaction” to refer to a “… deferred amount at the inception of the agreement not exceeding R8 000
Clarity was provided that where the consumer cannot pay the initiation fee upfront, it may form part of the deferred amount upon which interest is calculated.
Therefore credit providers who enter into short-term credit transactions, should ensure that the total of the principal debt and the initiation fee deferred at the inception of the credit agreement, does not exceed R8 000.
We therefore, recommend that short-term credit providers who are not registered of VAT do not enter into loan agreements where the principal debt exceeds R7 213.64, in which case the initiation fee will be R786,36 (VAT excluded) (total deferred amount is R8 000) and for short-term credit providers that are registered for VAT do not enter into loan agreements where the principal debt exceeds R7 107.85, in which the initiation fee will be R892.15 (VAT inclusive) (total deferred amount is R8 000).
If a credit provider is registered for VAT and the initiation fees accrues VAT, this should be taken into consideration.
