More SA households are turning to loan sharks just to survive
A new report finds that low income households are increasingly turning to loan sharks in order to pay for food for their families.
The report, published by Pietermaritzburg Agency for Community Social Action (Pacsa), found that income is not enough to buy enough food for a month, and not enough to cover all other essential household requirements.
Shockingly, food typically ran out after 2 to 3 weeks, the 2015 Pacsa Food Price Barometer found.
Low income households are under-spending on food by as much as 55.6%.
Pacsa found that consistently across all focus groups, women said that it was becoming more of a struggle to afford the food their families needed.
“They located this problem not only in food price increases but in the increased pressure of the cost of other essential goods and services.”
This includes:
- Transport, electricity and education;
- The increased cost of debt and deeper indebtedness;
- The low increase in social grants; general low wages;
- And the loss of jobs and no jobs – implicating a decrease in the number of household members bringing in an income and increasing pressure on the wage earner.
The report said that families were being maintained – food on the table and kids schooled – through high level of household debt, the clever management thereof, stokvels, and “through savviness in knowing where to shop to get good prices”.
“The gap between the bulk staples purchased once a month and the shortfall is taken up through credit which is rigorously managed from spaza shops, umashonisa (loan sharks), credit schemes (government and private) and mholiswane (interest free loans from friends and relatives). Stokvels are critical in this mix,” Pacsa said.
That households are forced to take credit to buy food is indicative of the extent and seriousness of the affordability crisis, the report said. That food is a continuous expense however, having to take credit to buy food, traps households into a vortex of debt.
“Women were telling us that they were absorbing the burden (because they simply had to) but that their situations were precarious, and they were increasingly vulnerable to shocks,” Pacsa said.
The report also warned about the nutritional aspect for a low income vale, where a balanced diet has become a luxury.
“Households are eating fewer varieties of foods and eating these same foods all the
time. Women said the ‘cheaper’ food they were forced to buy was of poor quality and that they had noticed that these foods were deteriorating still further,” the report said.
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