Women are paying as much as 50% interest to loan sharks just to put food on the table.
According to the Pietermaritzburg Agency for Community Social Action (Pacsa) Food Price Barometer’s 2017 report‚ borrowing from loan sharks is "a major strategy to cover food shortfalls". "This is happening all over Pietermaritzburg‚" the report said.
Fifty-three women in Pietermaritzburg told the agency that they were forced to borrow from loan sharks with higher interest rates as they had burnt bridges with others.
The lowest interest rate is R30 on R100 but it can be as high as R50 on R100. Women who had borrowed R300 with an interest rate of R50 for every R100 would have to pay the full R450 before they could borrow again.
“Omashonisa (loan sharks) don’t have any mercy‚” one woman told Pacsa. “They have no heart. They don’t think how you are going survive. You pay until you cry. They will push you for two years for their R300. It is a sin. They really bury us.”
Pacsa said borrowing from a loan shark to buy food was “pretty much the worst possible thing you can get yourself into‚” particularly if food price inflation was high. “The debt is higher than the income coming in. I go and pay my debt and get another loan‚ the next loan is higher than the previous month’s loan‚” a woman who identified herself as Madiba told Pacsa.
Another woman said a loan shark visits her on the 15th of every month. “He is ready for me with my R300. I try and make it last. Mostly I just go once. I use this money to close the gaps in food. I buy 12.5kg of maize meal‚ electricity‚ potatoes and some sishebo (stew)‚” she said.
Pacsa predicts that more households will sink deeper into debt as food price grows.
“It is just going to worsen‚ ... destroy the already very tenuous basis of society and rip apart all remaining social relationships‚” the agency said.
“It will mean that the options created by other women we have spoken with around stokvel portfolios and producing and selling goods and services will not have a place to find root. With the bonds having been broken; households will just be left on their own: individualised and responsible for their poverty.”