T Makgato

Loan sharks, also known as mashonisas in townships and villages, use unethical tactics for surety such as withholding the borrower’s social grant cards and IDs and sometimes they use threats and violence when the borrower delays making repayments.

This was revealed in a report by the non-governmental organisation, Black Sash, into how loan sharks were taking advantage of desperate social grant recipients and reckless and uncontrolled lending. The research observed that the practice of illegal lending has intensified, especially among elderly people and single mothers who are grant recipients and do not qualify for formal loans. A crucial point mentioned was the unregulated nature of the mashonisa model, preventing victims from seeking help from regulators. Additionally, they highlighted the alarming tactics of mashonisas, such as employing hitmen instead of using other means for debt collection. The ANC condemns this practice by these loan sharks and calls for more financial literacy in rural or under-resourced areas. In addition, more visibility of both the NCR and National Financial Ombud Scheme SA (NFOSA) in these communities will help prevent these practices and give communities greater protection.