Getting access to a loan in South Africa has become slightly easier following amendments to the National Credit Act. Banking institutions have been trusted lenders for decades but an increasing number of people are also turning to micro lenders when they need cash.
A segment of the market that was previously ignored is the pensioner segment.
Loans for pensioners in South Africa
Studies have shown that regular income flow pensioners have access to credit, but this also makes them easy prey for loan sharks and other unscrupulous micro lenders. They are often charged at more than double the rate of commercial banks for short term loans. This can largely be attributed to the fact that many lenders expect the loans to be repaid within 24 months and it’s expected that pensioners will have a much harder time repaying the loan on time.