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Asha Speckman
ABSA has launched a new initiative that will offer loans to hawkers.
The bank said earlier this week that it was expecting low single-digit growth in loans this year.
The pilot hawker loan project would first be offered to customers of the Tshwane Fresh Produce Market, and it would run until June, Absa said yesterday.
The monthly loans range from R400 to R1 500 and are payable in weekly instalments.
Lawrence Twigg, the managing executive of Absa’s Entry Level and Inclusive Banking, said in a statement: “This loan facility is closely linked to the buying patterns of hawkers and uses their stock-buying trends to help assess business viability.”
Alfonso Makana, 45, began selling fruit in the Johannesburg CBD 19 years ago with R400 he had borrowed from his sister. His greatest expense is R60 for transport to and from the market. Makana said he would be interested in such a loan to grow his business.
Neighbouring stallholder Malwandle Ngoveni, aged 26, picked up where his mother left off five years ago and started selling vegetables to earn a living. His business is self-financed and on a good day, depending on how much stock he has bought and sold, he can reap up to R3 000 in revenue.
Ngoveni said a loan would help him to expand his business, especially by offering other products such as telephone services.
“I’ve always wanted to open a shop but the problem is that I cannot afford rent,” he said.
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Observer, wrote
It will be interesting to see how this pans out, because I reckon these are the last people who can "afford" to borrow, if they're already living a hand-to-mouth existence. My general principle is never to borrow money - one becomes the slave of the lender, especially with the interest that one has to repay on top of the amount borrowed. And if one does have to borrow for something big, one should be sure one can afford the repayments, and to accelerate the repayments so one cuts down on the interest paid and the time one is in debt.
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