Loan sharks feed on poor

2015-10-16 10:15
Pacsa director Mervyn Abrahams and colleague Julie Smith.

Pacsa director Mervyn Abrahams and colleague Julie Smith. (Amil Umraw)

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Pietermaritzburg - Ruthless loan sharks are cashing in on desperate families who are merely trying to feed their children.

This is according to the Pietermaritzburg Agency for Community Social Action (Pacsa) which released its Food Price Barometer for 2015 yesterday.

This shocking finding, according to Pacsa director Mervyn Abrahams showed that “numerous families categorised in low-income brackets” have to borrow money from “informal creditors like loan sharks and ‘spaza’ shop owners” to manage the food costs in their homes each month.

The statistics showed, for instance, that 6 kg of chicken neck pieces increased by a whopping 66,3%; 2,5 kg of polony by 18,2%; and a tray of 30 eggs by 8,2%.

The report, which was compiled by interviewing 35 women from Crossing, France, Haniville, Madiba and Snathing in various focus groups, found residents struggled to secure the goods and services needed to live at a “level of basic dignity”.

Running out of food by the second or third week of each month, households were becoming trapped in a “vortex of debt” to feed their families.

To illustrate the inflation of food costs year on year, Pacsa’s Food Price Barometer assesses the cost of two “food baskets”; one containing the prices of core staple foods needed to survive and a “protein basket” which outlines foods that secure a basic level of nutrition. Based on the average shopping basket in a grocery store, the inflation on core staple foods increased by 6,6% to R1 616,97 between November 2014 and September 2015.

The highest increases were seen in maize meal (14,4%); 10 kg of white sugar (6,7%); 10 kg of rice (6,3%) and one kg of salt (9,7%).

“When core staple foods increase, they reduce the money available for other foods resulting in the loss of diversity on the plate,” said Abrahams.

The inflation of the protein basket showed an increase of 7,7% during the same period. “The increase was driven by the lower quality proteins which households were switching to in an effort to at least secure a basic level of nutrition,” Abrahams said.

With the basic cost of a minimal nutritional food basket for a household of seven family members estimated at about R3 644, the data showed households are underspending on food by R2 027 (55,6%). For a household with an income of R3 200 — the maximum income level for 60% of Pietermaritzburg households — proper nutrition comes to 113,9% of household income.

“The key to dealing with the current food affordability crisis and getting households out of the cycle of poverty lies in finding ways to substantially increase income levels,” Abrahams said

Read more on:    pietermaritzburg  |  poverty

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