Is it safe to borrow from a mashonisa?
Are mashonisas dangerous?
Although newspapers are frequently peppered with stories which reference mashonisas in the same breath as violence, assault and murder, a brand new study suggests that informal lenders may not be the bogeymen (and women) they are presented as. In fact, mashonisas come from many corners of life and typically lend simply because they have entrepreneurial flair and a little capital.
After interviewing mashonisas from Khayelitsha, Cape Town, researchers discovered a broad range of genders, age groups and professional backgrounds involved in the informal lending sector; from post office workers to former beauty saleswomen. While this broad demographic doesn’t rule out the possibility of violence, it certainly suggests that mashonisas are not uniformly violent criminals. The apparent popularity of the practice also spoke to the relative safety of the practice.
While working with a mashonisa may not (necessarily) be directly dangerous, it is important to remember that these are illegal, unregulated loans. Consumers have no real rights in the eyes of the law, and no recourse to justice if something goes wrong. Instead, they are at the mercy of their chosen mashonisa.
Great care must be taken when considering any type of unregulated finance. Mashonisas have been known to hike interest rates and use techniques including shaming and harassment to ensure repayment. Despite this, most mashonisas hold an accepted place in communities.
Mashonisas: A local view
Many views of mashonisas were revealed during the course of this recent research, conducted by Wonga. Some people described the acceptability of mashonisas, others praised the straight-forwardness, while some bemoaned the shame and humiliation which can stem from using a mashonisa’s services…
- “If I had a friend who is an informal lender, I have accepted it even though it is wrong, but it is good that he takes that TV because he needs his money back. To you it might be confusing because I have told you that he takes things from other people and why would I want to invite him into my home? But in our society, it is different.”
- “If you go to a mashonisa, at the end of the month they want their money back and then you are done”.
- “It’s a matter of me being respected in the community. They won’t know (with a formal lender) that I am deep in debt if I don’t tell them my story. But with the mashonisas, everybody knows”.
Convenient credit, with local risks
While it’s impossible to state that any unregulated, illegal industry is safe, there is evidence that borrowing between R50-5,000 from a mashonisa is relatively commonplace in South Africa. Although some mashonisas use humiliating or aggressive practices, a great many transactions appear to run smoothly, filling a significant gap in South Africa’s increasingly strict credit market. So is it safe to use a mashonisa? No, but the practice has become so socially embedded with informal communities that we cannot expect regulations that make this practice risk free to be implemented any time soon.