By Loushe Jordaan Gilbert
State social grants are used as collateral for high-interest loans by unregistered or informal lenders, also known as loan sharks, who continue to target social grant recipients, particularly the elderly or single moms. To make matters worse, these dishonest lenders are not subject to any laws.
Speaking on VOC Breakfast on Wednesday Odwa Nweba Stellenbosch University Law Clinic said grant recipients, often in dire need of access to credit, cannot borrow money on a fair basis.
“Since they do not qualify for loans from formal lenders, they often have no alternative other than to borrow from informal lenders who lend money at illegal interest rates (between 30 – 100% per month) and use forms of loan collateral or security such as keeping borrowers’ SASSA or bank cards and ID books for extended periods, even in perpetuity,” he stressed.
Listen to full interview below:
