Question 2632
Mrs S P Kopane (DA) to ask the Minister of Social Development:
(1) Whether she has been informed that a certain company (name furnished) allegedly granted loans to recipients of state grants at an interest rate of 50 percent; if so,
(2) Whether any investigation has been launched into these allegations; if not, why not; if so, what are (a) the findings, (b) the recommendations and (c) the further relevant details;
(3) Whether any action has been taken against the company; if not, why not; if so, what are the relevant details?
Reply:
(1) No, the minister has not been informed of allegations of the CPS (Northern Cape) granting loans to recipients of State Grants at an interest rate of 50 percent.
(2) Yes.
(a) During our investigation into the practice by CPS, it transpired that (according to CPS) its holding company is registered with the National Credit Regulator (NCR) to operate a loan scheme. However, the certificate provided by CPS was questioned by the region as CPS was not listed on the NCR credit provider database and South African Social Security Agency (SASSA) Northern Cape regional office is in possession of a copy of the alleged proof of registration that belongs to another business entity going under the name of Friedland 035 Investments (Pty) Limited. This is contrary to the provision of the schedule that gave the entitlement to Cash Paymaster Services (Pty) Limited/Aplitec.
(b) In terms of the current Service Level Agreement the CPS is contracted to render only the cash payment service to the Agency. Schedule 2 – RDP Program of Action of the previous SLA provides that the service provider will make a loan facility available for the beneficiaries on a market related basis to counteract local ‘loan sharks’. However, the current SLA has no similar provision. It is our conviction that the schedule 2 was ultra vires in that Section 20 of the Social Assistance Act, No. 13 of 2004 provides that a beneficiary must without limitation or restriction receive the full amount of a grant to which he or she is entitled before any other person may exercise any right or enforce any claim in respect of the grant amount. Only the Minister may sanction deductions from a beneficiary’s social grant, which deductions must be necessary and in the best interest of the beneficiary.
(3) Yes, action has been taken as outlined below:
- A formal investigation into the matter has been instituted;
- The matter has been reported to the National Credit Regulator; and
- SASSA has ordered CPS’s or Friedland 035 Investments (Pty) Limited not to pursue the practice and to comply with the 100m radius applicable to all unauthorised vendors.
