Yesterday, 11 October 2017, the Chairperson of the Standing Committee on Community Development, Lorraine Botha, paid a surprise visit to the “Financial Services Provider, (FSP)” XY Money Loans in Somerset West.
This visit, which is pursuant to a recent report in “Die Son” newspaper that approximately 600 people from Sir Lowrys Pass, Macassar, Strand, and Gordon’s Bay, have not received their SASSA grants as their cards were required as surety by XY Money Loans in order to guarantee loan repayments, found that this entity is a conniving and calculating loan shark.
These SASSA recipients were then given new cards, into which the balance of their grants were paid, after their monthly deductions were made.
It was established that their trade name is XY Fashion Trading (PTY) LTD, which is a company based in KwaZulu-Natal. The director is one, Mr. Xiuyong Chen.
This FSP is, however, in contravention of various laws, as prescribed by the National Financial Services Board:
- Their FSP registration certificate is not displayed on the wall, nor could they produce a registration certificate.
- On 22 June 2016, Mr Chen applied to the National Credit Regulator for an additional registration certificate, and even though this application was approved, there is no evidence that any registration certificate exists.
- Furthermore, a notice on their door clearly stipulates that the entity only “helps SASSA beneficiaries”. This opportunism is based on the regular payment of SASSA grants from which XY Fashion Trading is then guaranteed their repayments.
- More than 2 100 beneficiaries have taken out loans at this FSP and since January 2017, more than 600 have defaulted on their loan repayments.
- They claim not to confiscate any SASSA cards, as reported, yet they furnish successful loan applicants and SASSA beneficiaries with a FEZA VISA card. Once the full loan amount, along with a 5% interest, as they once again claim, has been deducted, the balance is paid into the card.
- They also use a debt collection company to retrieve loans from beneficiaries which have defaulted on their loan repayments, and this would mean an additional collection fee.
I have already written to the Provincial Minister of Finance, Ivan Meyer, to verify whether Financial Services Provider (FSP), XY Money Loans, is registered with the National Financial Services Board, and operates within the respective legal framework. This entire entity and its practices are completely unacceptable and these conniving loan sharks must be brought to book.
Furthermore, I once again call on SASSA in the Western Cape to advise grant beneficiaries to be vigilant and make them aware of opportunistic individuals who seeks to prey on their vulnerability. As the DA in the Province, we will continue to ensure that all Western Cape beneficiaries are protected from individuals or groups who seek to exploit them.
Lorraine Botha MPP
Chairperson of the Standing Committee on Community Development in the WCPP
DA Western Cape Spokesperson on Community Development