Most suspicious ‘bridging finance’

RETURNS CAUSE CONCERNS

Choice Lifestyle Change, which says it provides opportunities in the bridging finance market, offers clients returns of up to 15%/month. It operates in Polokwane and Gansbaai, and claims to be supporting a Christian outreach initiative.

The nature of the scheme, run by Maarten Stapelberg in the Western Cape and Wouter Botha in Limpopo, however raises serious concerns about its legitimacy.

“My occupation is that of a bond originator. I have a list of clients. If people need money they contact me for the interim, maybe a week or two weeks, then I contact my clients and tell them what is available and they can partake in providing security,” Stapelberg said.

Choice claims to be only connecting people who need money with others offering it, like a peer-to-peer exchange. But here’s where what Choice does gets blurry, as Stapelberg says no loans are given, only guarantees.

“… Once you are a member you will receive an e-mail with opportunities that are available that you can take up. When you do that, you will pay over whatever money into the account. That money will lay dormant. When the opportunity has been fulfilled, you get your payout.

He says it isn’t registered with the Financial Services Board or the National Credit Regulator and he doesn’t provide loans or bridging finance. “I provide a guarantee stating this client has enough money to pay. Upon maturity we receive interest.”

Bridging finance aims to supply immediate liquidity to people who need it over a very short period. If they don’t actually receive the money, it’s unclear why they’d see any value in it, particularly given the rates Choice charges.

“The end user … will come to an agreement to pay the interest rate that is charged in the bridging market. That can be anything, depending on the amount, from 5% up until 30% per month.”

Choice’s members will only ever see a maximum of 15%, as Choice withholds half the interest; Stapelberg claims it’s used to fund the operations of a Christian organisation called Free Agape Enterprises, of which he’s a director.