Loan sharks still lurk underground

“They are spread across the country and prey on the poor and the disadvantaged,” Dr Stoop said.

Illegal confiscation

His claim was backed by the South African Social Security Agency who said in a statement that loan sharks were using illegal methods to obtain security against money borrowed.

"There are still (social) beneficiaries whose payment cards and identity documents have been confiscated by loan sharks as security for the money borrowed," said Sassa chief executive officer Fezile Makiwane.

He said those involved in this "unscrupulous practice" needed to stop or risk being arrested.

Report it

Thousands of people had been victims of this practice, said Makiwane, advising those who found themselves in such situations to report the matter to their nearest Sassa offices and the police.

"It is illegal for any unauthorised person to take away and keep someone's payment card or identity document as these belong to the state."

Dr Stoop, whose Elite Group is a major player in the micro-lending industry, said law-abiding micro-lenders across the country were generally aware of these illegal operations and cooperated with the South African Police Services to shut them down.

Targeting

“The problem is that some of these loan sharks have been driven so deep underground that only their clients know where and how to get hold of them.

“Many of them function on a completely informal basis. They wait for pension day at rural pay points and then walk up and down the lines of pensioners offering ‘cheap' loans. Once they have their claws in a pensioner or other helpless victim, they confiscate their pension cards and their ID books,” Dr Stoop said.

Violation of rights

Makiwane said those affected were being denied access to government services where such documents were required. Their right to vote was also under threat.

"Their identity documents will serve as essential tools as we approach next year's general elections.

"Therefore the loan sharks must not prevent them from exercising their right to vote by keeping their identity documents," Makiwane concluded.