Minister wants to put loan sharks out of business

Friday, July 1, 2011

East London - Social Development Minister Bathabile Dlamini says people who victimise the elderly must be brought to justice.

Dlamini was addressing Social Development MECs from around the country at a meeting held in East London on Thursday to discuss a number of issues, including protecting the elderly from abuse, victimisation by loan sharks and social security scams.

"We, as a nation, must not let the marginal few who abuse and victimise our elderly get away with it," said Dlamini.

She was referring especially to loan sharks, whom she accused of withholding people's identity documents when they fail to pay what they owe.

"Withholding someone's documentation for purposes of extorting money out of them is against the law and should be stopped with immediate effect," said Dlamini.

She said to make matters worse, loan sharks are charging the elderly interest rates of between 30 and 50 percent, "which is well above the legal interest rate that a financial institute can charge someone."

Social Development Deputy Minister Bongi Ntuli described loan sharks as an "intractable problem", claiming that the department had tried everything to deal with them.

"We've worked with the National Credit Regulator (NCR), the police and Home Affairs. This problem has also stressed South African Social Services Agency's resources because instead of focusing on distribution of benefits, they've had to act as investigators as well," said Ntuli.

Eastern Cape Social Development MEC, Pemmy Majodina, said it was important that people listen to financial advice provided by SASSA officials when collecting their grants.

"We work very closely with SASSA in ensuring that people receive the necessary financial guidance when they get to our pay points so that we don't have our people going to loan sharks. We must put these illegal enterprises out of business," said Majodina.

Another agenda discussed at the meeting was the contentious issue of pension pay points, to which Majodina said there was no "one size fits all approach."

"Different people want different things. We can't decide on a particular pay method or point, and then later only to find out that this is not what people want. All we can do is to try and make the current pay points as safe and secure as possible," added Majodina.

The delegation will visit departmental funded projects tomorrow in Mdantsane, King Williamstown and Keiskammahoek.