SA’s most influential business lobby groups have voiced rare but blistering public dissent against trade, industry & competition minister Parks Tau.
This is after Tau scrapped proposed changes to the National Credit Act (NCA) that were meant to help small businesses secure loans.
Tau abruptly withdrew the draft amendments to the NCA, a dramatic U-turn prompted by a storm of public and political opposition over a clause it was feared would have listed educational institutions as originators of credit information and made student debt reportable to credit bureaus.
Supporters of the proposals argued those provisions predated the current amendments and that changes would help plug data gaps that block credit access for small businesses, the sputtering engine of economic growth and jobs.
Premature
The Banking Association SA (Basa), which speaks for all the major domestic players, called the move premature and procedurally flawed, enough to corrode trust in every future policymaking effort.
“The withdrawal of draft amendments to NCA regulations has compromised due process and the interests of micro, small and medium enterprises (MSMEs) on the basis of known misinformation,” Basa said in a statement on Sunday.
“Of great concern is that the minister withdrew the proposed amendments before the closing date for comments on the draft regulations. He did this on the basis that the vast majority of submissions received, until then, were opposed to the proposed regulations without presenting any detail to that effect.”
Business Unity SA (Busa) echoed this sentiment, saying that Tau has botched the policy-making process and caved in to political pressure.
“This withdrawal is a problem on a number of fronts because an instrument that was intended to allow smaller SMEs [below R1m] to access credit without onerous criteria is now on hold.
“The actual amendment did not touch the issue of credit bureaus having access to information,” Busa’s CEO, Khulekani Mathe, told Business Times, sister publication to Business Day.
The rift between business and government comes at an inopportune time for SA, which business leaders have urged to adopt predictable and evidence-based policymaking if it is to spark a private sector economic recovery.
The kerfuffle reflects governance malaise in which policy U-turns are driven by headline pressure rather than economic logic, leaving small businesses caught in the crossfire of politics and pitting growth-minded reforms against populist sentiment.
The government’s sudden withdrawal of proposed credit reforms — intended to ease loan access for small businesses — has triggered a rare backlash from business groups. They say Parks Tau’s move undermines trust, ignores due process and derails efforts to close a R350bn funding gap for SMEs, all due to political pressure and misinformation about student debt outcomes.
“That the minister chose not to wait to hear from those who might have made different submissions is not a reflection of the robust nature of SA’s democracy, but rather an indication of a disregard for proper, meaningful and legally required consultation in the face of misplaced and misinformed political pressure,” Basa said. “This sets a dangerous precedent for current and future legislative processes in SA.”
Tau published draft regulations last month, drawing 20,000 mostly negative submissions before last Friday’s deadline. The EFF, among political actors, mobilised against the changes, framing them as “anti-poor, anti-youth” while the ANC’s general secretary, Fikile Mbalula, declared that the proposals “didn’t reflect ANC policy”.
In the end, the swelling tide compelled Tau to back down even before the end of the consultative process. A major flashpoint in the debate was what Basa described as a misunderstanding of the student debt clause, which was misread as amounting to blacklisting students who owe tuition fees.
“The proposed draft amendments have nothing to do with allowing credit bureaus to receive credit information from educational institutions. The provision for credit bureaus to receive credit information from educational institutions has been in the NCA since 2006,” Basa said.
“It is not a new proposal and has not been introduced in the draft amendments. It is unfortunate that the minister and his department were seemingly not aware of the provisions in the legislation for which they are responsible.”
Basa said the withdrawal left urgent unfinished business in the small business credit market.
Data from the 2025 MSME Access to Finance report showed that small businesses account for 40% of SA’s GDP and employ about 60% of the workforce but face a R350bn fund gap.
“As it stands, extensive work undertaken by a business-government partnership in support of small businesses has now been disrupted, renewing concerns that government does not have a coherent, complementary economic policy, but rather a cluster of ministers and departments that act in their own short-term interests,” Basa said.
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