South Africa payroll and developmental loan decision template

Build a payroll, developmental or pension-backed loan decision for a South African consumer in decision automation software, with each stage in the order it runs. Copy the rules that are numbers or lists as cells into a decision table.

Stages of the loan decision

The stages run in this order inside one decision, and each outcome keeps its reason.

Stage	Checks	Rule
Eligibility	For developmental credit, check supplementary registration and a qualifying purpose such as education, a small business or low-income housing, since Reg 23A does not apply and s.81 still does, and confirm the employer arrangement for payroll loans.	NCA s.10, s.41; Reg 23A(2)(a)
Identity	Check identity and fraud as for an online loan, verify the payslip, and confirm employment with the employer.	FIC Act s.21; NCA s.90(2)(l)
Credit risk	Check the bureau report and payslip deductions, including emoluments attachment orders, and decline debt review cases unless the loan is for consolidation, which goes to a person.	NCA s.81(2)(a)(ii), s.88
Affordability	Assess discretionary income from means, prospects and obligations under Reg 23A for payroll loans that are not developmental credit, and treat emoluments attachment orders above 25% of basic salary as a sign of strain.	NCA s.81; Reg 23A; Magistrates' Courts Act s.65J(1A)
Exposure	Check the rate and fees against the credit-type caps, including developmental credit at the repo rate plus 27% a year and a small-business initiation fee capped at R2,600, and end pension-backed terms by retirement.	Reg 42; Reg 44; NCR Guideline 002/2019
Vulnerability	Refer cases involving a consumer near retirement, several deductions on one payslip or a debt review flag to a person.	NCA s.88; NCR Guideline 002/2019
Outcome	Set an approve, decline or refer outcome, record one main decline reason and name the bureau when its report drove the decision, and provide a way for the consumer to make representations to a person.	NCA s.62; POPIA s.71
Record	Keep the online-loan record for three years, with the deduction mandate and the employer’s consent beside it.	Reg 56

Rules as decision table cells

Each table 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.

Affordability by credit type

This table selects Reg 23A for payroll loans and the lender’s s.81 assessment for developmental credit, which Reg 23A leaves out.

`product.credit_type` Condition	`affordability.basis` Result	`affordability.reg_23a` Result
`=developmental`	`s81_own_assessment`	`false`
`*`	`reg_23a`	`true`

Bureau debt review

The table declines a consumer under debt review and sends a consolidation loan to a person, with the bureau named as the reason’s source.

`bureau.debt_review` Condition	`application.purpose` Condition	`decision.outcome` Result	`decision.reason` Result	`decision.reason_from_bureau` Result
`=true`	`=consolidation`	`refer`	`consolidation_under_debt_review`	`true`
`=true`	`*`	`decline`	`debt_review`	`true`
`*`	`*`	`continue`		`false`

Emoluments attachment orders

Refer the application when orders exceed the 25% of basic salary ceiling in s.65J(1A) of the Magistrates’ Courts Act, using their monthly total divided by basic salary calculated before the table.

`payslip.eao_share_of_basic` Condition	`decision.outcome` Result	`decision.reason` Result
`>0.25`	`refer`	`eao_above_25_percent`
`*`	`continue`

Pension loan retirement date

Decline a pension-backed loan when its term extends beyond retirement, using the term less the months to retirement calculated before the table.

`product.pension_backed` Condition	`application.months_past_retirement` Condition	`decision.outcome` Result	`decision.reason` Result
`=true`	`>0`	`decline`	`term_past_retirement`
`*`	`*`	`continue`

Rates and fee caps

Sets each credit type’s rate above the repo, initiation fee, monthly service fee and credit life caps, with the developmental row for a small-business loan.

`product.credit_type` Condition	`cap.rate_over_repo` Result	`cap.fee_base` Result	`cap.fee_above` Result	`cap.fee_max` Result	`cap.service_fee` Result	`cap.credit_life_per_1000` Result
`=developmental`	`27`	`275`	`1000`	`2600`	`60`	`4.5`
`=unsecured`	`21`	`165`	`1000`	`1050`	`60`	`4.5`

Using the template

This template reads the National Credit Act, its regulations, the Magistrates’ Courts Act and POPIA for building one decision. The lender’s legal team should check it against the current text before use.

Identity, employer confirmation, the deduction mandate and records sit in the lender’s process around the decision. The tables cover the rules the decision itself applies.

The NCA affordability calculator works the Reg 23A expense norms for one consumer, and the short-term and unsecured loan template carries the expense norms as cells.

The store credit template sets out rules for store credit.

NCA credit types

Each page below gives one credit type’s definition under the National Credit Regulations, its caps and the caps as decision table cells.

Questions we get asked

Does Reg 23A apply to developmental credit?

Reg 23A(2)(a) excludes developmental credit from Reg 23A. The lender still assesses affordability under s.81.

What is the limit on emoluments attachment orders against salary?

Under s.65J(1A)(a) of the Magistrates’ Courts Act, the employer checks total emoluments attachment orders. They must not exceed 25% of the employee’s basic salary.

How long can a pension-backed loan term run?

NCR Guideline 002/2019 says the term runs no later than the consumer’s retirement date. The loan term must end by that date.

What is the maximum interest rate on developmental credit in South Africa?

Reg 42 Table A and Table B, as amended by GN 1080 of 2015, cap the rate at the repo rate plus 27% a year. For a small-business loan, the initiation fee is R275 plus 10% of the amount above R1,000, up to R2,600.