MFSA Calls for Urgent Review of Credit Rates and Fees

PRESS RELEASE

MicroFinance South Africa (MFSA), the national body representing over 1,800 registered credit providers, has welcomed the decision by Minister of Trade, Industry and Competition, Mr Parks Tau, to withdraw the Draft National Credit Act Amendment Regulations. MFSA believes the move underscores the importance of meaningful consultation in shaping regulations that protect consumers while ensuring fair and inclusive access to credit.

However, MFSA cautions that the withdrawal should not slow progress on urgently needed reforms to credit pricing. The association warns that outdated and inadequate rate and fee structures — unchanged since 2015 — are putting smaller and developmental credit providers under increasing strain. Many of these providers operate in rural and township economies, serve SMMEs, and reach first-time borrowers who would otherwise be excluded from the financial system.

“Our sector fills a gap banks often won’t. Without an inflation-linked review of rates and fees, providers serving the most vulnerable South Africans will continue to close their doors, cutting off critical lifelines of credit,” said MFSA CEO, Leonie van Pletzen.

MFSA highlights that:

• Nearly 13 million credit applications per quarter are rejected under current pricing constraints.

• Short-term unsecured credit is used for key developmental purposes — MFSA’s research shows 18% goes to education, 14% to micro-enterprise, and 9% to housing.

• Static caps on interest rates and fees erode sustainability for providers who are already tightly regulated under the National Credit Act.

• The association is calling on the Minister and the dtic to urgently convene a stakeholder engagement process to review rates and fees. MFSA argues that a balanced, evidence-based framework is essential to:

• Keep credit affordable for consumers.

• Maintain the financial viability of legal credit providers.

• Prevent consumers from turning to unregulated or illegal lenders.

MFSA stands ready to collaborate with government and regulators to craft a modernised, inflation-linked pricing framework that protects consumers while safeguarding sustainable credit provision.

Ends

About MicroFinance South Africa

MFSA represents South Africa’s registered microfinance institutions, advocating for ethical lending, consumer protection, and financial inclusion. Through industry leadership, MFSA promotes responsible credit practices that empower individuals, support small businesses, and drive economic growth. For more information please visit https://www.mfsa.net/.

About Leonie van Pletzen

Leonie van Pletzen is the Chief Executive Officer of MicroFinance South Africa (MFSA), a leading voice for the microfinance sector in South Africa. With nearly 15 years of experience in the industry, Leonie is recognised as a passionate advocate for ethical lending, financial inclusion, and regulatory reform. Having risen through the ranks at MFSA since 2010, she brings a wealth of expertise in industry advocacy, corporate governance, stakeholder engagement, and sustainable development.

Leonie has played a key role in shaping policy dialogue between government, regulators, and the private sector, and is an active contributor on various national committees, including the National Credit Regulator’s Credit Industry Forum and the Banking Sector Education and Training Authority. Her leadership is defined by a commitment to protecting vulnerable consumers while ensuring the long-term sustainability of responsible credit provision in South Africa. 

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