Micro-lenders exploiting mining communities
Dodgy credit providers are reportedly flourishing in poor mining communities.
CAPE TOWN - An investigation by the National Credit Regulator has revealed how unscrupulous micro-lenders are running rampant in poor mining communities.
The regulator together with Trade and Industry Minister Rob Davies warned they will be cracking down on dodgy credit providers in areas such as Marikana in the North West.
Davies said it is not just the Marikana mining community which is buckling under the strain of high levels of debt.
The regulators Nomsa Motshegare says officials have been visiting such communities across the country investigating micro-lenders.
She emphasised arrests have been made, adding several banks are also being investigated.
Motshegare said some loan sharks have been keeping identity documents and bank cards.
According to Davies, debt incurred by striking miners is fuelling their demand for higher salaries.
Of the 13 credit providers operating in the Marikana area, 10 were found to be flouting loan regulations.
Marikana made world headlines in August after scores of people were killed during illegal strikes.
Miners were demanding better salaries and were forced to go without an income during the strike.
Many had to turn to loan sharks to support their families during the industrial action.