MFSA is calling for an urgent policy review of an identity verification fee hike. MicroFinance South Africa is requesting national policymakers to urgently review the proposed increase in identity verification fees announced by the Department of Home Affairs (DHA). It has warned of severe consequences for both the credit industry and consumers.
Calls for Urgent Policy Review Over Identity Verification Fee Hike
The new fee, which will affect private companies verifying ID numbers and personal information, could further strain an already overburdened credit sector.
“While we support efforts to protect identity systems and ensure FICA compliance, this additional fee adds yet another cost burden to formal lenders. they are already operating under an outdated and restrictive regulatory framework,” said MFSA CEO Leonie van Pletzen.
Van Pletzen highlighted that the National Credit Act (NCA) has not seen a revision of fee caps since 2015, despite rising inflation and growing compliance demands.
Increased costs could threaten the formal credit sector
These include affordability assessments, POPIA data protection, and DebiCheck systems.
“The compliance costs are now simply unaffordable. Without a review of allowable credit charges, many legitimate lenders—especially those in rural areas—will be forced to close or downscale,” she warned.
According to a study by 71point4 Consulting, 59% of consumers turned away by formal lenders now resort to informal mashonisas, where high interest rates and lack of oversight leave borrowers vulnerable.
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MFSA outlined key challenges:
Soaring compliance costs with no mechanism to recover them;
Stagnant regulatory framework since 2015;
Declining access to safe, formal credit;
A surge in illegal lending practices.
Van Pletzen called the DHA’s proposal “well-intentioned but potentially damaging,” especially for low-income and remote communities.
MFSA is urgently appealing for:
A review of the credit fee structure.
Cross-sector collaboration to develop sustainable compliance strategies;
Suspension of the DHA fee hike until a long-term solution is found.
“Without affordable compliance structures, even the most ethical lenders will not survive,” she concluded.
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