Why South Africans Rejected Credit Law Changes and What Comes Next

South Africans have spoken, and government has had to listen. Minister of Trade, Industry and Competition Parks Tau has pulled back on draft amendments to the National Credit Act after an avalanche of criticism from ordinary citizens, students, business owners, and civil society groups.

The proposals, tabled in August, would have given credit bureaus sweeping powers to access personal data from institutions as wide-ranging as universities, utilities, debt collectors, insurers, courts, and even fraud investigators. For many, the idea of a missed tuition fee or an old fraud investigation appearing on their credit report was simply a step too far.

A Wave of Public Pushback

By the time the deadline for public comment closed on 12 September, over 20,000 submissions had poured in. According to departmental spokesperson Kaamil Alli, the overwhelming majority rejected the proposals.

On social media, critics framed the amendments as an attack on already struggling households. One post that gained traction on X (formerly Twitter) read: “We’re drowning in debt already, now government wants to weaponize our personal info against us?”

For many South Africans, it wasn’t just about privacy, it was about survival.

Why It Struck a Nerve

The timing of these changes could not have been worse. Debt has become a lifeline for households buckling under rising costs.

DebtBusters’ latest Debt Index showed that 91% of people entering debt counselling in early 2025 already carried at least one personal loan, while more than a third also relied on payday loans. Benay Sager from DebtBusters explained that many South Africans lean on short-term credit just to cover everyday expenses, because incomes haven’t kept up with inflation.

Eighty20’s Credit Stress Report paints an equally grim picture: overdue balances on mortgages and credit cards are climbing, and for the first time since early 2023, defaults are on the rise again. On average, South Africans with credit spend nearly a third of their income paying it back.

Against this backdrop, the idea of adding student fees, criminal records, and utilities into the credit mix felt more like punishment than protection.

Small Businesses in the Crossfire

The draft amendments also targeted small businesses, requiring more extensive financial checks before granting funding. While framed as a way to strengthen risk management, critics argued it would only deepen the struggle for small and medium enterprises to access capital.

In a country where small businesses are often hailed as the engine of job creation, the proposed rules seemed out of step with government’s own economic goals.

What Government Says

Minister Tau has promised to revisit the proposals, stressing that the goal was never to burden consumers but to improve the accuracy of credit information and strengthen protections.

His department highlighted the importance of balancing two urgent needs:

• shielding consumers from predatory lending,

• and improving access to finance for micro, small, and medium businesses that remain locked out of funding opportunities.

But Tau admitted the section affecting students and small businesses will require a rethink and committed to wider stakeholder engagement before any revised draft is put forward.

A Democratic Win

If there’s one clear takeaway, it’s that public participation works. The sheer volume of submissions forced government to step back and reconsider, offering a rare moment where ordinary voices directly influenced policy.

The withdrawal doesn’t mean the issue is over, but for now, South Africans have ensured their debt burdens won’t be made heavier by rules that many felt were out of touch with reality.

{Source: BusinessTech}

Follow Joburg ETC on Facebook, Twitter , TikTok and Instagram

For more News in Johannesburg, visit joburgetc.com