Fin24

Davies: Illegal lending fuelling strikes

2012-10-11 21:00

Cape Town - Illegal lending practices are fuelling wage disputes in the country, Trade and Industry Minister Rob Davies said on Thursday.

He was updating the media on investigations by the National Credit Regulator (NCR) into complaints of irregular practices by micro-lenders in the Marikana area following raids this week.

Davies said preliminary indications were that mine workers had high levels of debt, because of unsecured loans.

"Much of that is at levels which make it unsustainable, which erode deeply into the incomes of those communities and fuel high demands for salary increases by those workers," said Davies.

A total of 13 micro-lenders were identified in what Davies called a "smallish community". The NCR visited 12 of them.

At face value, two were found to be operating within the law.

The other 10 were identified as being engaged in practices that were in direct contravention of the National Credit Act.

"A number of them were engaged in illegal practices like charging interest rates above the prescribed maximum, taking people's bank cards, pins and ids and a series of illegal garnishee orders," said Davies.

In one case, a worker making R9 000 a month took home less than R3 000 because of illegal garnishee orders, he said.

This was adding to the pressures on low income workers to demand higher salaries.

"A small increase in pay is not going to make a huge dent in their living standards when a huge part of that income is eaten up by garnishee orders or high interest consumer loans."

NCR CEO Nomsa Motshegare said several credit providers found in possession of workers' documents were arrested at Marikana.

"There will be referrals to the National Consumer Tribunal for the imposition of administrative fines and refunds to consumers," said Motshegare.

She and Davies indicated that the crackdown on reckless lending practices would be extended to other mining and low-income communities.

"I believe we cannot allow reckless lending and the unwarranted preying on the weaknesses and vulnerability of low-income people," said Davies.

He said the institutions involved in illegal lending in Marikana would not be named at this stage.

However, he warned that the NCR would take action without fear, favour, or prejudice.

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Comments
  • Eterni80 - 2012-10-11 21:50

    as usual the ANC doggy barks at everyone except it's master

  • grootrot.vanzyl - 2012-10-11 21:51

    And did you report this to the police Robbie? Why did the police not investigate this looonnnggg time ago?

      abraham.mbambo.14 - 2012-10-24 16:27

      The police can only investigate what they know. Now that they know they will start investigations.

  • neo.motsepe - 2012-10-11 21:51

    Wouldn't want to guess who owns this credit provider businesses.

      dorette.forrester - 2012-10-11 22:40

      Now you're talking! Would also like to know who owns those businesses.

  • gaius.longinus.9 - 2012-10-11 22:08

    FICA?

  • blip.noodlum - 2012-10-11 23:39

    Why has the ANC regime not investigated, charged and prosecuted these micro-lenders then? As for miners imprudently availing themselves of attractive lines of credit, that's not the government or the employer's concern. The miners are grown men. They aren't children. As adults they may arrange their own money affairs any legal way they wish, and they must bear all the consequences of their decisions. Lenders may promote and advertise their wares any legal way they like too -- that's the grown-up world we live in. Politicians must patronise neither.

      mc.segal.5 - 2012-10-12 06:18

      And they can choose who they would like at Election times too Their Choice..

      abraham.mbambo.14 - 2012-10-24 16:31

      I disagree with you there. In that case adults would not need to report acts of injustice to the police. Since they are grown ups they should be able to deal with issues themselves. That is why there is the LAW and people who enforce it.

  • kingKanete - 2012-10-11 23:50

    alibi of the year

  • Bongani Mtambo - 2012-10-12 05:48

    what abt the Govenment borrowing money 2 enrich themselves then forcing us 2 pay it even worse they change the constitution 2 implement it without consulting us. i mean m living from hand 2 mouth as it is nw where must i get the extra R500 for e-tolling? these ministers r the instigators

      robqb - 2012-10-12 22:43

      Here's hoping you put your "X" where your mouth is!

  • henk.vanrensburg.31 - 2012-10-12 06:34

    Now we have the real reason for the conditions the find themselves in. Nothing to do with the mine. Years of strikes taking its toll.

  • Mn Mlilo - 2012-10-12 06:46

    its amazing how the gvt reacts n comment on things like microlenders cz at the end of the day ,yet the economy is so much flooded by so many instututes n companies that rob us consumers in broad day light,take for examples e motor industry ,we have plants in e EC yet we pass so much for cars like we literally importing them from overseas,one really wonders really!!!!!

  • DuToitCoetzee - 2012-10-12 07:10

    "Making R 9000 a month"....i thought it was R 4500 or less....or is it now after the increase? I agree. Get rid of those lenders, but people must also try to live on their budget. One can never get out/up when lending money and it is not for property etc..

  • sisie.indola - 2012-10-12 07:33

    Why should the workers take responsibility for their own mistakes, it is the litany of the anc and brethren to NOT accept responsibility for anything - blame apartheid, blame the whites and blame the employer. But i had nothing to do with it...alright!

      sexyfancyface - 2012-10-13 05:48

      Wow Sisie you deserve to be our president really! Spot on...

  • sean.tearnan - 2012-10-12 07:40

    Makes a lot of sense. So the first should be to close down these illegal micro-lenders and then those people need to be educated. Now Education is the Governments job....come on Government educate these people

  • dave.ueckermann - 2012-10-12 07:52

    So, because of the miners being conned into accepting these loan interest rates the country burns and is on the verge of destruction. Didnt the unions investigate this before they proceeded to get the miners to strike. I say due to the miners's stupidity and lies they should be fired and their pension payouts should be used to plough back into the communities that they have destroyed

  • sean.tearnan - 2012-10-12 07:52

    Each time they strike they take out a loan to survive, who's smiling greedy microlenders. they then blames mines cause they can't live on there salaries. Well live within your means and STOP squandering your Salary and blaming someone else. We all have to live within our salaries why not them. R 9000 p/m is well above the breadline and there would be millions of people in SA including me who can live well on R 9000 p/m. If you want to earn more do like we all do Educate ourselves and work harder. A employee offers you a job at a salary and what it entails and you both understand a path forward for your career. ITS up to you to accept job and conditions and work hard to progress your career. If you don't like it don't accept the job after all no one is holding a gun to your head. If you accept violent striking as a way to get a salary increase in 20 years you will still be at the bottom of the food chain and the clever ones will be your boss

  • mart.botha - 2012-10-12 08:27

    Get real Davies...should the Trade and Industry Ministry not be teaching Economics 101 to the masses who are screaming for more money but are not cognatively equipped to manage it.. Seems a bit like asking Jub Jub to drive the safety car at Killarney Racetrack don't you think. Or perhaps the Ministry that should be giving these tools the tools is Education...or is it Finance.....is it Mines.....or is it Health or could it even be Culture ????? Who knows??

  • Zoli Mbambo - 2012-10-12 08:41

    the thing with south africans is that, we never want to take responsibility for our own action. nobody told the miners to go use loan sharks, especially since we all know that they dont operate as they should. yes they needed the money but getting a loan only leads to more debt. that's the logic of it

  • helio.paulo.7 - 2012-10-12 09:13

    This man has a point....lets look at all the contributing factors..the mining houses have been getting all the blame and yet i know some like Anglo American really try hard to improve the lives of their employees, so lets see the WHOLE picture.....lets face it, there are plenty of sharks out there targetting the weak!

  • veronique.vanster - 2012-10-12 09:44

    progress!!!!!!!!!

  • kevin.watson.7906 - 2012-10-12 09:49

    The problem is that the economically illiterate useless Minister of Trade and Industry cannot see the wood for the trees. The miners believe that they can borrow however much they need, to finance items they cannot afford (yes they are barely literate and certainly economically illiterate), and do not understand that they have to live on the money they earn. Yes the money lenders may have acted illegally and they should be prosecuted in terms of the law. However if they stop operating, the miners will not be able to borrow to finance their extended families and that will create other problems. Had they received a halfways decent education they would not be as dumb as they appear to be in the management of money. Mind you in Zimbabwe Robert Mugabe said he could not see any reason why there should be a limit on Government borrowing. It appears that even with a university degree there is no understanding that borrowed money needs to be repaid.

  • jim.dickson2 - 2012-10-12 10:22

    So, we live above our income then demand more from our employers to pay the loan sharks. Not a pretty picture. Where do the loan sharks go to get paid when I am fired because of the strike?

  • mo.haarhoff - 2012-10-12 10:53

    And what, exactly have the National Credit Regulators been doing for 18 years? Sitting firmly on their butts with their feet on their desks. It took a crisis like this and a million hints about garnishee orders and learning to read salary slips for them even to begin looking into the situation. Transport strike next, you SOBs and don't expect and annual bonus or a Christmas break, NCR: you have failed us!

  • carol.brand.5030 - 2012-10-12 11:01

    i'm sorry? they borrowed the money, now they p***sed that they have to pay it back, so they burn and destroy OTHER PEOPLE'S property. Sub zero intelligence if you ask me. What other excuses will come out next i wonder?

  • phillip.joubert.56 - 2012-10-12 12:44

    I am in the mining clouds and this is a fact lots of creditor phone me on daily basis because mine workers own them money sometimes is three lending company's on one day looking for the same person and if you check his income it is 50 persent more then he earn monthly. Then there ie also the loan sharks in the townships do not let them get away because they are the mobs that trenden the miners with burning their houses and killing his kids if they do not pay up on time. This is a wishes cycles of events. Need to exspose them big time. As said they are the dangerous njokas

  • sexyfancyface - 2012-10-13 05:46

    So if these people know nothing about financial planning whose fault is it and we need to visit their double story houses in the Eastern Cape....I know many of these people they will stay in a shack and will tell you their homes are back in the rural areas and that is where they build nicer homes!

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