Grant beneficiaries in spiral of debt

Homeless fall prey to loan sharks

INDIGENT people continue to have money taken off their grants to repay loans they easily acquire, as court cases rage on to try to make sure their payouts achieve their purpose – to alleviate poverty.

On Tuesday, the Black Sash will apply to appeal against a North Gauteng High Court ruling last month that allowed social grant payment provider Net1 to continue deducting money from beneficiaries’ accounts.

The South African Social Security Agency (Sassa) said the court had also ruled that it could not control what went out of beneficiaries’ accounts and could not give the exact figure of how many of South Africa’s 17.6 million grant beneficiaries had loan deductions. However, spokesman Kgomoco Diseko confirmed that 120 000 people had sent in complaints.

According to the Black Sash, as of March, two million people had signed up for loans with Easypay Everywhere, a facility linked to Net1.

Kobus Cloete is the human face of the court saga as he takes one loan after the other against his grant to pay off the last loan.

“You just can’t get out of it,” he told The Independent on Saturday at Glenridge Church, on top of Durban station, where he and other street people attend a “home group” service once a week.

Cloete said he came to Durban from Pretoria but could not afford to go back because he existed month-bymonth on a reduced income.

“I am stuck in Durban. I got work for a while in eManzimtoti but after they heard I could get a disability grant, they chased me away,” he said.

Cloete, a chef and a baker, said he was in a motorcycle accident five years ago.

Glenridge Church member, David Armstrong, who helps people like Cloete, said many did not understand what they were doing taking out these loans.

“People in this situation should not be getting loans,” he said.

Armstrong said people fought uphill battles to get grant cards, especially if they were homeless, then the first thing some did was head straight to sales tables where loans were processed and saw what they could get, a month ahead of their first grant payments.

Another grant beneficiary, who could afford a shelter, said that after paying R600 for his accommodation, he took out loans because it was impossible to live on R20 or R30 a day.

Armstrong said many people he helped suffered addictions to which they were all the more vulnerable. “The minute they are back on the streets where it is cold, they are hungry and desperate.

“It’s easy to say ‘we helped them out but they went straight back into it’. These loans are one thing that led to them getting their fix.”

He said people who so obviously could not manage their finances being able to ask for loans with no questions asked “seems to be reckless lending”.

He gave the example of a pensioner who received R1 600 but had been paid only R182 in April; R515 in May and R234 in June.

“Assuming all the rest was deducted for loans, how is it possible that such a high percentage can be deducted from a person’s pension or grant?”

Armstrong said lenders could be found with tables set up next to where grant beneficiaries drew money at the end of the month.

“They are not there to help the people. The motive is to make money,” he said.

Net1 has been accused of offering its associated companies access to grant beneficiaries’ details for marketing purposes.

Business director Bridget von Holdt responded, saying: “We have on numerous occasions provided empirical evidence that beneficiary information is not shared with any subsidiary in the group or any other company for that matter.

“The contract between (the Net1 company directly involved with Sassa), Cash Paymaster Services (CPS) and Sassa, is very clear regarding the information gathered on behalf of Sassa and where ownership of the information resides.

“Net1 has previously provided the National Credit Regulator with independent verification from KPMG, that its subsidiaries do not have access to, or share any data gathered by CPS on behalf of Sassa.” On Thursday, the Constitutional Court ordered an investigation into whether Social Development Minister Bathabile Dlamini was to blame for the grants debacle.

“The minister is joined as a party to the proceedings in her personal capacity. The parties must within 14 days from the date of this judgment report to this court whether they have agreed to a process in terms of Section 15 of the Superior Courts Act of 2013, to determine the issues relating to the minister’s role and responsibility in the establishment and functioning of work streams,” said Justice Johan Froneman.

Sassa chief executive Thokozani Magwaza and the former director-general of the department, Zane Dangor, filed affidavits claiming that Dlamini by-passed top officials through parallel decisions and communication processes.