Building on previous research that produced the Challenging Reckless Lending in South Africa report in 2020, which later resulted in the Debt, Credit and Consumer Rights Handbook for Paralegals in 2023, this report seeks to highlight the issue of indebtedness and makes recommendations to curb involuntary indebtedness, especially among social grant recipients. This was achieved by firstly offering debt and credit training to community leaders, lay advisers, and community-based paralegals, and secondly by using evaluative workshops to build knowledge collaboratively to develop practical solutions, some already existing on the ground, and some informed by our training.
The training and research revealed that social grant recipients were being targeted by unregistered lenders – often referred to as mashonisas, who use state social grants as security for high-interest loans. We observe that the practice of illegal lending has intensified, especially amongst elderly people and single mothers who are grant recipients and do not qualify for formal loans.
Through this project, we have established that government grant recipients, who are often in dire need of access to credit, cannot borrow money fairly since they do not qualify for loans from formal lenders. The report aims to give substance to the human dignity, the achievement of equality, and the advancement of human rights and freedoms foregrounded in our Constitution.
