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Protector to probe loan scheme

Public Protector Thuli Madonsela will do a preliminary probe of claims that a company distributing social grants was operating an illegal loan scheme, her office said on Monday. “She is going to do an extended assessment and a preliminary investigation,” said her spokeswoman, Kgalalelo Masibi. “Then she needs information from the chairperson of the task team of director generals, and she also needs to speak to three other people, whose names she won't disclose at this stage.” The Democratic Alliance approached Madonsela after allegations were made that Cash Paymaster Services (CPS) was operating a loan scheme targeting social grant beneficiaries.

DA MP Mike Waters said CPS had won a multi-million rand tender last year to administrate and distribute SA Social Security Agency grants across the country. However, according to media reports CPS had been operating the loan scheme. Waters said it was alleged that CPS officials offered and provided certain beneficiaries “interest-free” microloans, with repayments automatically deducted from their social grants. Media reports suggested that the interest rates on some of these loans were as high as 50 percent. “These practices are not only a contravention of the Social Assistance Act, but a blatant manipulation of some of the most vulnerable members of our society,” he said.

“Social grants are a necessary safety net to assist poor South Africans. The fact that some of our most vulnerable citizens, who are in desperate need of assistance, are being treated this way leaves me angered.” The DA called for a full-scale investigation of the allegations.

Source: www.iol.co.za

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Protector to probe loan scheme

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