Developmental credit agreement caps under the NCA

A developmental credit agreement funds a purpose named in the Act and is made by a lender with supplementary registration. Use the maximum interest rate and fees at the current repo rate, set out as decision table cells, to build and run an automated credit decision.

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What counts as developmental credit

A developmental credit agreement is for small business development, low-income housing, an educational loan, a credit co-operative loan or another prescribed purpose. The lender must be registered for it under s.41 (s.10).

The purpose and the lender’s supplementary registration determine whether an agreement falls within this type. For a natural person, the lender’s assessment rests on s.81 because Reg 23A does not apply.

Developmental credit rate and fee caps

Reg 42 sets the interest rate and initiation fee caps, and Reg 44 sets the service fee cap. The Credit Life Insurance Regulations 2017 set the credit life cap. The interest rate cap is set over the repo rate, so it moves with each Monetary Policy Committee decision.

Limit	Maximum amount	Rule
Interest rate Small business	27 percentage points a year above the South African Reserve Bank repo rate, 34.25% a year at 7.25% from 23 September 2026	Reg 42 Table A
Interest rate Low-income housing	27 percentage points a year above the South African Reserve Bank repo rate, 34.25% a year at 7.25% from 23 September 2026	Reg 42 Table A
Initiation fee Small business	Fixed amount R275, plus 10% of deferred amount above R1,000, capped at R2,600	Reg 42 Table B
Initiation fee Low-income housing	Fixed amount R550, plus 10% of deferred amount above R1,000, capped at R2,600	Reg 42 Table B
Monthly service fee	Monthly cap of R60	Reg 44
Credit life cost	R4.50 for every R1,000 of the amount deferred	Credit Life Insurance Regulations 2017

Developmental credit caps as decision table cells

Each table below copies as cells to paste into a decision table, with one column per attribute. The attribute paths are examples to rename to your own data.

Developmental credit limits by purpose

Sets the maximum rate over the repo rate, service fee and credit life cost for developmental credit, by purpose.

`loan.credit_type` Condition	`loan.purpose` Condition	`pricing.max_margin_over_repo` Result	`pricing.max_service_fee` Result	`pricing.max_credit_life_per_1000` Result
`=developmental`	`=small_business`	`27`	`60`	`4.5`
`=developmental`	`=low_income_housing`	`27`	`60`	`4.5`

Developmental credit initiation fees

Sets the maximum initiation fee by purpose and amount, using a fixed amount plus a factor times the amount above a threshold.

`loan.credit_type` Condition	`loan.purpose` Condition	`loan.amount` Condition	`fee.fixed` Result	`fee.factor` Result	`fee.above` Result
`=developmental`	`=small_business`	`<=1000`	`275`	`0`	`1000`
`=developmental`	`=small_business`	`(1000,24250]`	`275`	`0.1`	`1000`
`=developmental`	`=small_business`	`>24250`	`2600`	`0`	`1000`
`=developmental`	`=low_income_housing`	`<=1000`	`550`	`0`	`1000`
`=developmental`	`=low_income_housing`	`(1000,21500]`	`550`	`0.1`	`1000`
`=developmental`	`=low_income_housing`	`>21500`	`2600`	`0`	`1000`

Assessment for developmental credit

Reg 23A does not apply to developmental credit. Under Reg 23A(13), repayment history is checked within seven business days before approval or a limit increase where that regulation applies.

Under s.81, the lender assesses a natural person’s understanding, repayment history, means, prospects and obligations. For a commercial purpose, it also assesses whether the credit may succeed.

Developmental credit in market figures

The tiles below show figures from the NCR’s quarterly market report, and the consumer credit tracker carries the series.

NCR figures for the quarter ended June 2026

Gross debtors book

R65.4bn

Share of credit book

2.6%

Credit granted

R0.4bn

Book 120 days or more in arrears

6.9%

Build the decision

Use the NCA affordability calculator to work the caps for a type at a repo rate. Build from the payroll or developmental loan decision template and the small business loan affordability article. This page reads the regulations for building a decision, and the lender’s legal team checks it against the current text.

Other NCA credit types

Questions we get asked

What counts as developmental credit under the NCA?

It is credit for small business development, low-income housing, an educational loan, a credit co-operative loan or another prescribed purpose. The lender must be registered for developmental credit under s.41.

What is the maximum interest rate for developmental credit?

For small business development and unsecured low-income housing, the maximum is the repo rate plus 27 percentage points a year. The rate moves with each Monetary Policy Committee decision.

Does Reg 23A affordability apply to developmental credit?

Reg 23A does not apply to developmental credit. For a natural person, the lender’s assessment rests on s.81.

What is the maximum initiation fee for a small business development loan?

The fee is R275 plus 10% of the amount above R1,000. It is capped at R2,600.