Public Protector to investigate CPS loan scheme
27 May 2013
Following a request by the DA, the Public Protector, Thuli Madonsela, has confirmed that she will conduct a preliminary investigation into allegations that the company entrusted with the distribution of social grants in South Africa, Cash Paymaster Services (CPS), has been operating an illegal loan scheme targeting social grant beneficiaries.
CPS won a multimillion-rand tender last year to administrate and distribute South African Social Security Agency (SASSA) grants across the country. However, according to media reports, CPS has also been operating a loan scheme targeting grant beneficiaries.
In the scheme, it is alleged that CPS officials offer and provide certain beneficiaries ‘interest-free' microloans with repayments automatically deducted from their social grants. Media reports suggest that the interest rates on some of these loans are actually as high as 50%.
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.