For The People

“SASSA grants cannot be deemed income for credit applications” – NCT

With South Africa’s economy going downhill and the rate of unemployment painting the country red, social grant recipients are left seeking financial help through unscrupulous money lenders who end up taking their SASSA cards and forcing them to take up insurance with the cash loans.

According to stats SA’s recent report, 29.8% of households in the Northern Cape see Ss as their main source of income. The number of individuals benefiting from social grants has consistently increased from 28% in 2003 to 31% in 2018 and the percentage of households that received at least one social grant increased from 30.8% in 2003 to 44.3% in 2018.

Local shops in the central business district (CBD) owned by Chinese posing to sell clothing actually offer cash loans to grant recipients, while others rent out shops that have the national credit regulator sticker claiming to be accredited money lenders.  On the first of every month, grant recipients queue in long lines at the various cash loan shops with their identity document book, SASSA card and letter of confirmation stating that they receive the grant, hoping to get helped with money to see them through the month. Many walk into the clothing store pretending to be looking for an item while gathering the strength to approach Yipin, a bald  Chinese man  who owns the establishment. He is seen going through a pile of papers and identity books on the table.

Mary Mosia pulls herself together and approaches Yipin. He asks if she has all the necessary documents, she pulls out her SASSA card and identity book and is turned away as she does not have the letter of confirmation from SASSA.  Next in line is Motlalepule Lekgotla who has all the documents and wants R1000. She gladly hands over her card and is directed to the cash till where she’s given the money. She leaves, putting the money in her breasts and charges to OBC Chicken retailer to buy food. She is happy that she will be able to put food on the table.

“At least my kids will have food for the rest of the month now”.

In July, the National Consumer Tribunal (NCT) handed down judgment in favour of the NCR against Aristoscan CC, a micro lender trading as JMK Cash Loans. The evidence presented by the NCR showed that JMK Cash Loans extended credit to consumers who received child support and foster care social grants.

In its judgement, the NCT made a finding that child support and foster care social grants are income to be used for the benefit of third parties and cannot be deemed to be the consumer’s income.

“This judgement clarifies that child support and foster care social grants are not to be used as consumer income in credit applications. They are intended to be used for the care and support of the children,” said Motshegare.

The National Consumer Tribunal and the National Credit Regulator — which is responsible for the regulation of the South African credit industry are entities of the Department of Trade and Industry.

Comments are closed, but trackbacks and pingbacks are open.