The National Credit Regulator’s recent guidance on affordability assessments marks a significant shift in how credit providers and debt counsellors must evaluate consumers’ financial positions. As the changes take effect in 2026, they aim to tighten responsible lending practices while improving consistency across the credit market. For debt counselling in particular, the guidance reshapes how affordability is calculated, documented, and challenged, with important consequences for consumers already under financial pressure.
Understanding what has changed and how it affects the debt review process will be essential for practitioners and consumers alike in the year ahead.
Why the NCR Updated Its Affordability Guidance
Affordability assessments have long been at the centre of consumer protection in South Africa’s credit market. The National Credit Act requires lenders to ensure that consumers can realistically afford credit without becoming over-indebted. However, inconsistent application of affordability rules, combined with rising living costs and increased household debt, has exposed gaps in how affordability is measured.
The NCR’s updated guidance responds to these challenges. It aims to standardise assessments, reduce disputes around reckless lending, and ensure that credit decisions are based on realistic financial data rather than assumptions or outdated expense benchmarks. For debt counsellors, this shift brings both clarity and stricter expectations.
A More Realistic View of Consumer Expenses
One of the most important changes is the emphasis on more accurate living expense calculations. Historically, some credit providers relied heavily on minimum expense norms, which often underestimated what consumers actually need to live. This created a situation where consumers appeared to have disposable income on paper but struggled in reality.
The new guidance places greater weight on actual consumer expenses, supported by bank statements and other documentation. While expense norms may still be used as a reference point, they can no longer replace a proper analysis of real spending patterns. For debt counsellors, this reinforces the importance of conducting detailed financial assessments when placing consumers under debt review.
In practice, this means debt counsellors must spend more time verifying expenses and ensuring that proposed repayment plans are genuinely affordable. While this increases administrative effort, it also strengthens the long-term sustainability of debt review arrangements.
Stricter Documentation and Verification Standards
Another key aspect of the guidance is tighter documentation requirements. Credit providers are expected to retain clear records showing how affordability was assessed and which information was relied upon. This includes proof of income, expense verification, and the rationale behind approval decisions.
For debt counsellors, these records are critical when assessing whether credit was granted recklessly. In 2026, reckless lending investigations are likely to rely more heavily on documented affordability assessments rather than general arguments about consumer hardship. Where documentation is weak or incomplete, debt counsellors may find it easier to challenge credit agreements on behalf of consumers.
At the same time, debt counsellors themselves face increased scrutiny. The NCR expects debt counsellors to maintain equally robust records, demonstrating that they have followed prescribed assessment methods and acted in the consumer’s best interests.
Impact on Reckless Lending Claims
The updated guidance is expected to influence how reckless lending cases are argued and decided. By clarifying what constitutes a proper affordability assessment, the NCR has effectively raised the benchmark that credit providers must meet.
For consumers in debt review, this could lead to stronger cases where lenders failed to consider real expenses or relied on unrealistic assumptions. However, it also means that not every affordability dispute will automatically qualify as reckless lending. If a credit provider can show that it followed the guidance and assessed affordability thoroughly, debt counsellors may find it more difficult to challenge the agreement.
This shift encourages a more evidence-based approach to reckless lending claims, benefiting cases with strong factual support while discouraging speculative or poorly documented challenges.
What the Changes Mean for Debt Review Applications
From 2026 onwards, debt review applications are likely to become more detailed and data-driven. Debt counsellors will need to ensure that income and expense information is accurate, up to date, and supported by documentation. Consumers may be asked to provide more information than before, including additional bank statements or explanations for irregular spending.
While this may initially feel burdensome for consumers, it ultimately improves the quality of debt review outcomes. Repayment plans based on realistic affordability are more likely to be accepted by credit providers and upheld by courts, reducing delays and disputes.
Debt counsellors who adapt quickly to the new guidance may also find that their proposals face less resistance, as credit providers become more comfortable with a standardised assessment approach.
Implications for Credit Providers and Collaboration
The NCR’s guidance also affects how credit providers interact with debt counsellors. As affordability assessments become more standardised, there is greater potential for constructive engagement rather than adversarial disputes. Clear rules reduce ambiguity and help both sides focus on workable solutions.
However, credit providers are likely to scrutinise debt review proposals more closely, particularly where expense levels appear high. Debt counsellors will need to justify their calculations clearly and demonstrate that expenses are reasonable and supported by evidence.
This environment rewards professionalism and transparency. Debt counselling practices that invest in strong internal processes and staff training are better positioned to navigate these expectations successfully.
Preparing for 2026 as a Debt Counsellor
The transition to the new guidance requires preparation. Debt counsellors should review their assessment methodologies, update internal policies, and ensure that staff understand the NCR’s expectations. Technology can play a useful role here, with budgeting tools and document management systems helping to streamline assessments and record-keeping.
Consumer education is equally important. Clients should be informed about why more detailed information is required and how accurate disclosure benefits them in the long run. When consumers understand the purpose behind the process, they are more likely to cooperate fully.
Looking Ahead: A More Sustainable Debt Counselling Framework
The NCR’s new guidance on affordability assessments reflects a broader shift toward sustainability and accountability in the credit market. By grounding affordability decisions in real financial data, the regulator aims to reduce over-indebtedness and improve outcomes for consumers.
For debt counselling in 2026, this means higher standards but also greater credibility. Debt counsellors who embrace the guidance can offer more reliable solutions, protect consumers more effectively, and strengthen their role within the credit ecosystem.
While the changes may require adjustment, they ultimately support a fairer and more transparent system—one where affordability is not just a regulatory requirement, but a practical reality for South African consumers seeking a way out of debt.
Leave a Reply