social grant recipients

Many take out loans at the same Net1 offices they go to draw their social grants on grant pay day. Image: Mosima Rafapa

Social grant recipients borrow from surprising source

People depending on social grants say they are struggling to make ends meet with their grant money and have to resort to loans.

social grant recipients

Many take out loans at the same Net1 offices they go to draw their social grants on grant pay day. Image: Mosima Rafapa

Originally published by GroundUp/Mosima Rafapa

Most days snaking queues form outside the Net1 Financial Services office in Soshanguve Plaza, Pretoria.

People draw their social grants here but many also come to borrow money on their EasyPay Everywhere green cards because they can’t make ends meet with their meagre grant money.

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On the first Friday of June, there was a queue of about 250 people to draw old-age and disability grants, and another queue of about 100 people who wanted to take out loans against their social grants, a controversial but thriving business.

There are queues most days for loans and they start forming hours before the office opens at 8 am. People sometimes have to return the following day as the office cannot process everyone waiting in line by 4 pm.

Annah Zondo, 68, who lives in a shack in Soutpan, Tswaing, says her family cut meals down to two a day and she still has had to resort to taking out a loan.

By grant payout day there was nothing to eat at home for her family of seven. An old-age grant is R1 980. She said that after deductions, she received about R1 500 in June.

“I received my money yesterday but it’s already finished,” said Zondo.

She spent it mostly on groceries, then bought paraffin and paid her dues for a burial society.

“I’m here to borrow money again because I finished paying my loan which I took out in December,” she said.

She had borrowed R1 800 from Net1 and paid back over six months.

“I know that even the loan they give me [now] won’t last. I will suffer before the month ends,” said Zondo.

“I’m busy crushing tins that I collected so that I can make extra money.”

Annah Zondo


To take a loan of R1 400 and repay it in six months costs the borrower R462.

Some people take out loans to pay off loans.

Solly Mokoena, 64, from Soshanguve Block TT, joined the queue before 6 am. His old age grant helps support a family of five. He took out a loan for R1 800 with Net1.

He also borrowed from FinBond, first R600, then another R600.

“If only I could get a job because the grant money is too little. I owe Net1 R1 800 and I’m left with five months to finish paying it. At FinBond, I have a loan of R1 200 … By the time they have taken their money, I’m left with nothing,” he says.

“I live by borrowing. I’m used to it. The cost of living is too high.”

Solly Mokoena
The Net1 Financial Services at the Soshanguve Plaza in Pretoria


We returned on a Wednesday and there were again about 100 people in line. One was Mpho Mosima, who relies on the child support grants she gets for four of her children. She was there to apply for a loan.

Samuel Mosetlana, 67, from Winterveldt, said,

“I borrowed money from Net1 because I was tired of owing loan sharks where I live. I’m left with three months to finish paying off the R2 000. My wife is only 54 and doesn’t have any income. So my family relies on me. That’s why we turn to loans. The grant is too little, everything is expensive.”

Samuel Mosetlana

Moneyline Financial Services (Pty) Ltd, a subsidiary of the Lesaka Group (the rebrand of Net1) said it offers loans of between R100 to a maximum of R2 000, with a loan term of up to six months.

“We do not charge interest on the loans” the company says, but there are “service fees” (which can add up to about 32% of the loan value).

To obtain any Moneyline loan an applicant must be an existing EasyPay Everywhere customer and “needs to prove that they have three months’ worth of income, can afford the loan, and has a credit history in good standing”.

In its latest quarterly report, Net1 says Lesaka Technologies is pushing to grow the number of EasyPay clients and also microloan clients and to promote “cross-selling”, such as funeral insurance.

It signed up 5 500 new such standalone policies in the first quarter of 2022.

The report said the company had 1.1 million active customers and 415 000 active loans from EasyPay Everywhere clients with a total loan book of R359 million as of 31 March 2022.

The average loan size is R1 417.